☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
IslandsKY1-1102Islands
each class
Symbol(s)
on which registered
☐
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
ROCKET INTERNET GROWTH OPPORTUNITIES CORP.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021
TABLE OF CONTENTSSEPTEMBER 30, 2022
Page | ||||
1 | ||||
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1 | ||||
2 | ||||
3 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk | ||||
25 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities | ||||
-i-
Assets: Cash Prepaid Expenses Total current assets Cash and Securities held in Trust Account Total Assets Liabilities and Shareholders’ Equity Accrued offering costs and expenses Due to related party Total current liabilities Deferred underwriting fee Warrant liability Total liabilities Commitments and Contingencies Class A ordinary shares subject to possible redemption, 23,667,932 shares at redemption value Shareholders’ Equity: Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 3,032,068 shares issued and outstanding (excluding 23,667,932 shares subject to possible redemption) Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 7,187,500 shares issued and outstanding (1) Additional paid-in capital Accumulated deficit Total shareholders’ equity Total Liabilities and Shareholders’ Equity SHEETSI – I—FINANCIAL INFORMATIONSHEET March 31,
2021 (unaudited) $ 1,841,399 553,200 2,394,599 267,000,253 $ 269,394,852 $ 904,679 2,580 907,259 9,345,000 17,463,264 27,715,523 236,679,320 — 303 719 5,847,187 (848,200 ) 5,000,009 $ 269,394,852 (1)Included up to 512,500 founder shares at March 31, 2021 which were subject to forfeiture by the Sponsor if over-allotment option was not exercised in full or in part by the underwriter (see Note 6).
2022
(Unaudited)
2021 Cash $ 420,949 $ 904,957 Prepaid expense 148,217 270,569 569,166 1,175,526 Other assets — 59,835 Investments held in Trust Account 268,621,852 267,013,476 $ 269,191,018 $ 268,248,837 Accrued expenses $ 537,803 $ 381,140 537,803 381,140 Deferred underwriting fee 9,345,000 9,345,000 Warrant liabilities 931,876 8,848,042 10,814,679 18,574,182 Class A ordinary shares subject to possible redemption, $0.0001 par value; 26,700,000 shares at September 30, 2022 and December 31, 2021 (at redemption value of $10.00 per share) 268,621,852 267,013,476 Preferred shares, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding — — Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued and outstanding (excluding 26,700,000 shares subject to possible redemption at September 30, 2022 and December 31, 2021) — — Class B ordinary shares, $0.0001 par value, 20,000,000 shares authorized, 6,675,000 and 6,675,000 shares issued and outstanding at September 30, 2022 and December 31, 2021 668 668 — — Accumulated deficit (10,246,181 ) (17,339,489 ) (10,245,513 ) (17,338,821 ) $ 269,191,018 $ 268,248,837 thesethe unaudited condensed financial statements.-1-
Three Months Ended September 30, | Nine Months Ended September 30, | For the Period from January 27, 2021 (Inception) through September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Formation and operating costs | $ | 351,576 | $ | 170,820 | $ | 822,858 | $ | 346,242 | ||||||||
Loss from operations | (351,576 | ) | (170,820 | ) | (822,858 | ) | (346,242 | ) | ||||||||
Other income: | ||||||||||||||||
Interest earned on cash and marketable securities held in Trust Account | 1,207,352 | 4,102 | 1,608,376 | 8,413 | ||||||||||||
Transaction costs allocable to warrants | — | — | — | (561,706 | ) | |||||||||||
Unrealized gain on fair value changes of warrants | 1,076,959 | 6,088,062 | 7,916,166 | 8,013,610 | ||||||||||||
Total other income, net | 2,284,311 | 6,092,164 | 9,524,542 | 7,460,317 | ||||||||||||
Net income | $ | 1,932,735 | $ | 5,921,344 | $ | 8,701,684 | $ | 7,114,075 | ||||||||
Weighted average shares outstanding, Redeemable Class A ordinary shares | 26,700,000 | 26,700,000 | 26,700,000 | 20,497,166 | ||||||||||||
Basic and diluted net income per ordinary share, Redeemable Class A ordinary shares | $ | 0.06 | $ | 0.18 | $ | 0.26 | $ | 0.26 | ||||||||
Weighted average shares outstanding, Non-redeemable Class B ordinary shares | 6,675,000 | 6,675,000 | 6,675,000 | 6,440,081 | ||||||||||||
Basic and diluted net income per ordinary share, Non-redeemable Class B ordinary shares | $ | 0.06 | $ | 0.18 | $ | 0.26 | $ | 0.26 | ||||||||
Ordinary Shares | Additional Paid-In Capital | Accumulated Deficit | Total Shareholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2021 | — | $ | — | 6,675,000 | $ | 668 | $ | — | $ | (17,339,489 | ) | $ | (17,338,821 | ) | ||||||||||||||
Net income | — | — | — | — | — | 4,198,393 | 4,198,393 | |||||||||||||||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (21,792 | ) | (21,792 | ) | |||||||||||||||||||
Balance as of March 31, 2022 | — | — | 6,675,000 | 668 | — | (13,162,888 | ) | (13,162,220 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 2,570,556 | 2,570,556 | |||||||||||||||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (379,232 | ) | (379,232 | ) | |||||||||||||||||||
Balance as of June 30, 2022 | — | — | 6,675,000 | $ | 668 | — | (10,971,564 | ) | (10,970,896 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 1,932,735 | 1,932,735 | |||||||||||||||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (1,207,352 | ) | (1,207,352 | ) | |||||||||||||||||||
Balance as of September 30, 2022 | — | $ | — | 6,675,000 | $ | 668 | $ | — | $ | (10,246,181 | ) | $ | (10,245,513 | ) | ||||||||||||||
Operating costs | $ | 34,164 | ||
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Loss from Operations | (34,164 | ) | ||
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Other income (expense): | ||||
Interest earned on cash and marketable securities held in Trust Account | 253 | |||
Offering costs allocated to warrants | (561,706 | ) | ||
Change in fair value of warrant liability | (252,583 | ) | ||
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Total other expense | (814,036 | ) | ||
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Net loss | $ | (848,200 | ) | |
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Weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 22,369,083 | |||
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Basic and diluted net loss per ordinary share, Class A ordinary shares subject to possible redemption | $ | (0.00 | ) | |
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Weighted average shares outstanding, Non-redeemable Class A and Class B ordinary shares (1) | 6,598,160 | |||
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Basic and diluted net loss per ordinary share, Non-redeemable ordinary shares | $ | (0.13 | ) | |
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The
Ordinary Shares | Additional Paid-In Capital | Accumulated Deficit | Total Shareholders’ Deficit | |||||||||||||||||||||||||
Class A | Class B | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of January 27, 2021 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | — | — | — | — | (24,281 | ) | (24,473,190 | ) | (24,497,471 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (848,200 | ) | (848,200 | ) | |||||||||||||||||||
Balance as of March 31, 2021 | — | — | 7,187,500 | 719 | — | (25,321,390 | ) | (25,320,671 | ) | |||||||||||||||||||
Forfeiture of Class B shares by Sponsor | — | — | (512,500 | ) | (51 | ) | — | 51 | — | |||||||||||||||||||
Net income | — | — | — | — | — | 2,040,931 | 2,040,931 | |||||||||||||||||||||
Balance as of June 30, 2021 | — | — | 6,675,000 | 668 | — | (23,280,408 | ) | (23,279,740 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 5,921,344 | 5,921,344 | |||||||||||||||||||||
Balance as of September 30, 2021 | — | $ | — | 6,675,000 | $ | 668 | $ | — | $ | (17,359,064 | ) | $ | (17,358,396 | ) | ||||||||||||||
For the Nine Months Ended September 30, 2022 | For the period from January 27, 2021 (Inception) through September 30, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 8,701,684 | $ | 7,114,075 | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Interest earned on marketable securities held in Trust Account | (1,608,376 | ) | (8,413 | ) | ||||
Transaction costs incurred in connection with Initial Public Offering | — | 561,706 | ||||||
Unrealized gain on fair value changes of warrants | (7,916,166 | ) | (8,013,610 | ) | ||||
Changes in current assets and current liabilities: | ||||||||
Prepaid expense | 122,352 | (273,007 | ) | |||||
Other assets | 59,835 | (126,967 | ) | |||||
Accrued expenses | 156,663 | 50,000 | ||||||
Due to related party | — | 12,580 | ||||||
Net cash used in operating activities | (484,008 | ) | (683,637 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Purchase of investment held in Trust Account | — | (267,000,000 | ) | |||||
Net cash used in investing activities | — | (267,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from Initial Public Offering, net of underwriters’ fees | — | 261,660,000 | ||||||
Proceeds from promissory note – related party | — | 125,491 | ||||||
Proceeds from issuance of Class B shares to initial shareholders | — | 25,000 | ||||||
Proceeds from private placement | — | 7,340,000 | ||||||
Repayment of Sponsor loan | — | (125,491 | ) | |||||
Payments of offering costs | — | (403,496 | ) | |||||
Net cash provided by financing activities | — | 268,621,504 | ||||||
Net Change in Cash | (484,008 | ) | 937,867 | |||||
Cash – Beginning | 904,957 | — | ||||||
Cash – Ending | $ | 420,949 | $ | 937,867 | ||||
Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
Deferred underwriting commissions charged to additional paid in capital | $ | — | $ | 9,345,000 | ||||
Original value of Class A ordinary shares subject to possible redemption | $ | — | $ | 267,000,000 | ||||
Remeasurement of Class A ordinary shares subject to possible redemption | $ | 1,608,376 | $ | — | ||||
Initial classification of warrant liability | $ | — | $ | 17,210,681 | ||||
Accrued offering costs | $ | — | $ | 100,000 | ||||
-2-
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH MARCH 31, 2021
(UNAUDITED)
Class A | Class B | Additional | Total | |||||||||||||||||||||||||
Ordinary shares | Ordinary shares | Paid-in | Accumulated | Shareholder’s | ||||||||||||||||||||||||
Shares | Amount | Shares(1) | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
Balance as of January 27, 2021 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Sale of 26,700,000 Units, net of underwriting discount and offering expenses | 26,700,000 | 2,670 | — | — | 252,370,540 | — | 252,373,210 | |||||||||||||||||||||
Sale of 4,893,333 Private Placement warrants | — | — | — | — | 7,340,000 | — | 7,340,000 | |||||||||||||||||||||
Initial classification of warrant liability | — | — | — | — | (17,210,681 | ) | — | (17,210,681 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (848,200 | ) | (848,200 | ) | |||||||||||||||||||
Class A ordinary shares subject to possible redemption | (23,667,932 | ) | (2,367 | ) | — | — | (236,676,953 | ) | — | (236,679,320 | ) | |||||||||||||||||
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Balance as of March 31, 2021 (unaudited) | 3,032,068 | $ | 303 | 7,187,500 | $ | 719 | $ | 5,847,187 | $ | (848,200 | ) | $ | 5,000,009 | |||||||||||||||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
-3-
ROCKET INTERNET GROWTH OPPORTUNITIES CORP.
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 27, 2021 (INCEPTION) THROUGH MARCH 31, 2021
(UNAUDITED)
Cash flows from operating activities: | ||||
Net loss | $ | (848,200 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Interest earned on marketable securities held in Trust Account | (253 | ) | ||
Offering costs allocated to warrants | 561,706 | |||
Change in fair value of warrant liability | 252,583 | |||
Changes in operating assets and liabilities: | ||||
Prepaid assets | (553,200 | ) | ||
Accrued expenses | 532,679 | |||
Due to related party | 2,580 | |||
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Net cash used in operating activities | (52,105 | ) | ||
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Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (267,000,000 | ) | ||
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Net cash used in investing activities | (267,000,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts | 261,660,000 | |||
Proceeds from sale of Private Warrants | 7,340,000 | |||
Proceeds from issuance of Class B shares to Sponsor | 25,000 | |||
Proceeds from issuance of promissory note to Sponsor | 125,491 | |||
Payments on promissory issued to Sponsor | (125,491 | ) | ||
Payment of deferred offering costs | (131,496 | ) | ||
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Net cash provided by financing activities | 268,893,504 | |||
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Net change in cash | 1,841,399 | |||
Cash, beginning of period | — | |||
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Cash, end of the period | $ | 1,841,399 | ||
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Supplemental disclosure of cash flow information: | ||||
Initial classification of ordinary shares subject to possible redemption | $ | 221,526,083 | ||
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Change in ordinary shares subject to possible redemption | $ | 15,153,237 | ||
Deferred underwriter’s discount payable charged to additional paid-in capital | $ | 9,345,000 | ||
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Initial classification of warrant liability | $ | 17,210,681 | ||
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Accrued offering costs | $ | 372,000 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
-4-
Liquidity and Going Concern
Offering, and
-5-
If the Company does not complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
Liquidity and Management’s Plan
Prior to the completion of the Initial Public Offering, the Company lacked the liquidity it needed to sustain operations for a reasonable period or time, which is considered to be one year from the issuance date of the financial statement. The Company has since completed its IPO at which time capital in excess of the funds deposited in the trust and/or used to fund offering expenses was released to the Company for general working capital purposes. Accordingly, management has since reevaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date this financial statement is issued and therefore substantial doubt has been alleviated.
Note 2 — Restatement
On April 12, 2021,September 30, 2022, the StaffCompany had $420,949 in its operating bank account and working capital of $31,363.
-6-
Historically, the Warrants were reflected as a componenttime of equity as opposed to liabilities on the balance sheets and the statements of operations did not include the subsequent non-cash changes in estimated fair value of the Warrants, based on our application of FASB ASC Topic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity (“ASC 815-40”). The views expressed in the SEC Statement were not consistentfiling
Therefore,the liabilities that might be necessary should the Company in consultation with its Audit Committee, concluded that its previously issued balance sheetbe unable to continue as of March 25, 2021, filed by the Company on Form 8-K on March 31, 2021, should be restated in this a going concern.
As of March 25, 2021 | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Total assets | $ | 252,351,898 | $ | — | $ | 252,351,898 | ||||||
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Liabilities and shareholders’ equity: | ||||||||||||
Total current liabilities | $ | 847,645 | $ | — | $ | 847,645 | ||||||
Warrant liability | — | 16,228,167 | 16,228,167 | |||||||||
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Total liabilities | 9,597,645 | 16,228,167 | 25,825,812 | |||||||||
Class A ordinary share, $0.0001 par value; shares subject to possible redemption | 237,754,250 | (16,228,167 | ) | 221,526,083 | ||||||||
Shareholders’ equity | ||||||||||||
Preference shares - $0.0001 par value | — | — | — | |||||||||
Class A ordinary shares - $0.0001 par value | 122 | 162 | 284 | |||||||||
Class B ordinary shares - $0.0001 par value | 719 | — | 719 | |||||||||
Additional paid-in-capital | 5,016,413 | 561,544 | 5,577,957 | |||||||||
Accumulated deficit | (17,251 | ) | (561,706 | ) | (578,957 | ) | ||||||
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Total shareholders’ equity | 5,000,003 | — | 5,000,003 | |||||||||
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Total liabilities and shareholders’ equity | $ | 252,351,898 | $ | — | $ | 252,351,898 | ||||||
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Note 3 — Significant Accounting Policies
period presented.
-7-
Marketable Securities
Liabilities
income. (See Note 8).
-8-
The Company accounts
Income Taxes
Gross proceeds | $ | 267,000,000 | ||
Less: | ||||
Proceeds allocated to Public Warrants | (9,874,575 | ) | ||
Class A ordinary shares issuance costs | (14,626,790 | ) | ||
Plus: | ||||
Remeasurement of carrying value to redemption value | 24,501,365 | |||
Interest earned on investments held in Trust account | 13,476 | |||
Class A ordinary shares subject to possible redemption, 12/31/2021 | 267,013,476 | |||
Interest earned on investments held in Trust account | 1,608,376 | |||
Class A ordinary shares subject to possible redemption, 09/30/2022 | $ | 268,621,852 | ||
FASB
The Company’s condensed statement of operations includes a presentation of income (loss) per share for Redeemable Class A Ordinary Shares in a manner similar to the two-class method of income (loss) per share. Net income per ordinary share, basic and diluted, for Redeemable Class A Ordinary Shares is calculated by dividing the proportionate share of income or loss on marketable securities held by the Trust Account, net of applicable franchise and income taxes, by the weighted average number of ordinary shares subject to possible redemption outstanding since original issuance.
Net loss per share, basic and diluted, for Non-Redeemableduring the period. The Company has two classes of shares, Class A Ordinary Shares and Class B Ordinary SharesShares. Earnings and losses are shared pro rata between the two classes of shares. At September 30, 2022 and December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted income per share is the same as basic income per share for the period presented.
Non-Redeemable Class A Accordingly, basic and Class B Ordinary Shares includes Founder Shares and non-redeemable Class Adiluted income per ordinary sharesshare is calculated as these shares do not have any redemption features. Non-Redeemable Class A and Class B Common Stock participates in the income or loss on marketable securities based on non-redeemable ordinary shares’ proportionate interest.
Three Months Ended March 31, 2021 | ||||
Redeemable Class A Ordinary Shares | ||||
Interest earned on cash and marketable securities held in Trust Account | $ | 253 | ||
Net income allocable to redeemable Class A ordinary shares | $ | 212 | ||
Basic and diluted weighted average redeemable Class A shares outstanding | 22,369,083 | |||
Basic and diluted net income per share | $ | 0.00 | ||
Non-redeemable Class A and Class B Ordinary Shares | ||||
Net loss | $ | (848,200 | ) | |
Less: Income attributable to ordinary shares subject to possible redemption | (212 | ) | ||
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Adjusted net loss | $ | (848,988 | ) | |
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Weighted average shares outstanding, basic and diluted | 6,598,160 | |||
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Basic and diluted net loss per ordinary share | $ | (0.13 | ) | |
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-9-
Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2022 | For the Period from January 27, 2021 (Inception) through September 30, 2021 | |||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | Class A | Class B | Class A | Class B | |||||||||||||||||||||||||
Net income per share for Class A ordinary shares: | ||||||||||||||||||||||||||||||||
Net income | $ | 1,932,735 | $ | 1,932,735 | $ | 5,921,345 | $ | 5,921,345 | $ | 8,701,684 | $ | 8,701,684 | $ | 7,114,076 | $ | 7,114,076 | ||||||||||||||||
Less: Allocation of income to Class B ordinary shares | 386,547 | 1,546,188 | 1,184,269 | 4,737,076 | 1,740,337 | 6,961,347 | 1,700,813 | 5,413,263 | ||||||||||||||||||||||||
Adjusted net income | 1,546,188 | 386,547 | 4,737,076 | 1,184,269 | 6,961,347 | 1,740,337 | 5,413,263 | 1,700,813 | ||||||||||||||||||||||||
Weighted average shares outstanding of Class A ordinary shares | 26,700,000 | 6,675,000 | 26,700,000 | 6,675,000 | 26,700,000 | 6,675,000 | 20,497,166 | 6,440,081 | ||||||||||||||||||||||||
Basic and diluted net income per share, Class A ordinary shares | $ | 0.06 | $ | 0.06 | $ | 0.18 | $ | 0.18 | $ | 0.26 | $ | 0.26 | $ | 0.26 | $ | 0.26 |
Level 1 — | Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. | |
Level 2 — | Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. | |
Level 3 — | Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Management
-10-
If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the sixtieth (60th)(60th) business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption from registration. Notwithstanding the above, if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect,elects, it will not be required to file or maintain in effect aan effective registration statement, and in the event the Company does not so elect, it will use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering each such warrant for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying such warrant multiplied by the excess of the “fair market value” (defined below) over the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume-weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
-11-
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any founder shares held by the initial shareholders or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, plus interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume-weighted average trading price of the Class A ordinary shares
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The initial shareholders have agreed not to transfer, assign or sell any of their founder shares and any Class A ordinary shares issued upon conversion thereof until the earlier to occur of: (A) one year after the completion of the initial Business Combination; or (B) subsequent to the initial Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share
Due to Related Party
the Sponsor of $12,580, at September 30, 2021.
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PreferredDeficit
redemption which are presented as temporary equity.
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September 30, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account | $ | 268,621,852 | $ | 268,621,852 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 533,333 | $ | 533,333 | $ | — | $ | — | ||||||||
Private Placement Warrants Liability | 398,543 | — | — | 398,543 | ||||||||||||
$ | 931,876 | $ | 533,333 | $ | — | $ | 398,543 | |||||||||
March 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
U.S. Money Market held in Trust Account | $ | 267,000,253 | $ | 267,000,253 | $ | — | $ | — | ||||||||
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Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 10,005,825 | $ | — | $ | — | $ | 10,005,825 | ||||||||
Private Placement Warrants Liability | 7,457,439 | — | — | 7,457,439 | ||||||||||||
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$ | 17,463,264 | $ | — | $ | — | $ | 17,463,264 | |||||||||
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December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account | $ | 267,013,476 | $ | 267,013,476 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Public Warrants Liability | $ | 5,073,000 | $ | 5,073,000 | $ | — | $ | — | ||||||||
Private Placement Warrants Liability | 3,775,042 | — | — | 3,775,042 | ||||||||||||
$ | 8,848,042 | $ | 5,073,000 | $ | — | $ | 3,775,042 | |||||||||
Income.
During the three months ended September 30, 2022, the Public Warrants were reclassified from a Level 3 to a Level 1 classification due to use of the observed trading price of the separated Public Warrants.
Fair Value at January 1, 2021 | $ | — | ||
Initial fair value of public and private warrants issued at IPO | 16,228,167 | |||
Initial fair value of public and private warrants issued at over-allotment option exercise | 982,514 | |||
Change in fair value of public and private warrants | 252,583 | |||
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Fair Value at March 31, 2021 | $ | 17,463,264 | ||
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September 30, 2022:
Fair Value at December 31, 2021 | $ | 3,775,042 | ||
Change in fair value of private warrants | (1,896,014 | ) | ||
Fair Value at March 31, 2022 | 1,879,028 | |||
Change in fair value of private warrants | (1,026,971 | ) | ||
Fair Value at June 30, 2022 | $ | 852,057 | ||
Change in fair value of private warrants | (453,514 | ) | ||
Fair Value at September 30, 2022 | $ | 398,543 | ||
Inputs | (Initial Measurement) March 25, 2021 | March 31, 2021 | ||||||
Risk-free interest rate | 1.08 | % | 1.18 | % | ||||
Expected term remaining (years) | 6.08 | 6.06 | ||||||
Expected volatility | 24.4 | % | 24.4 | % | ||||
Share price | $ | 9.632 | $ | 9.636 |
Inputs | September 30, 2022 | December 31, 2021 | ||||||
Risk-free interest rate | 4.04 | % | 1.35 | % | ||||
Expected term remaining (years) | 5.50 | 5.95 | ||||||
Expected volatility | 8.6 | % | 13.10 | % | ||||
Share price | $ | 9.91 | $ | 9.80 |
On May 6, 2021, the Sponsor forfeited 512,500 founder shares for no consideration as a result of the underwriter not exercising the remainder of the over-allotment option.
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Rocket Internet Growth Opportunities Corp. References to our “management” or our “management team” refer to our officers and directors, references to the “sponsor” refer to Rocket Internet Growth Opportunities Sponsor GmbH. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Risk Factors” section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on January 27, 2021 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. While we may pursue an initial business combination target in any industry or region, we currently intend to focus on companies in the technology sector that can benefit from the expertise and capabilities of our management team in order to create long-term shareholder value. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (the “Initial Public Offering”) and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of this offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Results of Operations and Known Trends or Future Events
For the three months ended March 31, 2021,September 30, 2022, we had a net lossincome of approximately $848,000,$1,932,735, which included a loss from operations of $34,000, offering cost expense allocated to warrants of $562,000, and a lossincome from the change in fair value of the warrant liability of $252,000. $1,076,959, and Interest earned on investments held in Trust Account of $1,207,352, partially offset by loss from operations of $351,576.
For the nine months ended September 30, 2022, we had net income of $8,701,684, which included income from the change in fair value of the warrant liability of $7,916,166, and Interest earned on investments held in Trust Account of $1,608,376, partially offset by loss from operations of $822,858.
Our business activities from inception to March 31,September 30, 2022 consisted primarily of our formation and completing our IPO, and since the offering, our activity has been limited to identifying and evaluating prospective acquisition targets for a Business Combination.
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For the three months ended September 30, 2021, we had a net income of $5,921,344, which included interest earned on cash and marketable securities held in Trust Account of $4,102 and a gain from the change in fair value of the warrant liability of $6,088,062, offset by a loss from operations of $170,820.
For the period from January 27, 2021 (inception) through September 30, 2021, we had a net income of $7,114,075, which included interest earned on cash and marketable securities held in Trust Account of $8,413 and a gain from the change in fair value of the warrant liability of $8,013,610, offset by a loss from operations of $346,242 and offering cost expense allocated to warrants of $561,706.
Our business activities from inception to September 30, 2021 consisted primarily of our formation and completing our IPO, and since the offering, our activity has been limited to identifying and evaluating prospective acquisition targets for a Business Combination.
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Liquidity, and Capital Resources and Going Concern Consideration
As of March 31, 2021,September 30, 2022, we had cash outside our trust account of approximately $1.8 million,$420,949, and working capital of approximately $1.5 million.$31,363. All remaining cash was held in the trust account and is generally unavailable for our use, prior to an initial business combination.
Our liquidity needs have been satisfied prior to the completion of the Initial Public Offering through a payment of $25,000 capital contribution from our sponsor to cover certain offering costs on behalf of us in exchange for the issuance of the founder shares to our sponsor and up to $300,000 in loans from our sponsor.
On March 25, 2021, we consummated our Initial Public Offering of 25,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share, $0.0001 par value per share and one-fourth of one redeemable warrant to purchase one Class A ordinary share. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $250,000,000. We granted Citigroup Global Markets Inc., the underwriter in the Initial Public Offering (the “Underwriter”“Underwriter”), a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments, if any. On March 26, 2021, the Underwriter partially exercised the over-allotment option to purchase an additional 1,700,000 units (the “Over-Allotment Units”), which purchase settled on March 30, 2021, generating gross proceeds of $17,000,000. Simultaneously with the closing of the exercise of the over-allotment option, the Company completed the private sale (the “Private Placement”) of an aggregate of 226,666 warrants (the “Private Placement Warrants”) to our sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds of $340,000, which was used to pay the underwriting discount of 2% of the over-allotment gross proceeds.
Transaction costs of the Initial Public Offering (including the partial exercise of the underwriter’s over-allotment option) amounted to $15,188,496 consisting of $5,340,000 of underwriting discount, $9,345,000 of deferred underwriting discount, and $503,496 of other offering costs.
Upon closing of the Initial Public Offering, the Private Placement, and the sale of the Over-Allotment Units, a total of $267.0 million ($10.00 per Unit) was placed in a U.S.-based trust account, with Continental Stock Transfer & Trust Company acting as trustee. The proceeds held in the trust account have been invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (excluding deferred underwriting commissions), to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
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We do not believehave determined that we willmay need to raise additional funds in order to meet the expenditures required for operating our business prior to our initial business combination. However, if our estimates of thecombination, including costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $2,000,000 of such loans may be convertible into private placement warrants of the post-business combination entity at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the private placement warrants. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
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Moreover, we may need to obtain additional financing to complete our initial business combination, either because the transaction requires more cash than is available from the proceeds held in our trust account or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to target businesses with enterprise values that are greater than we could acquire with the net proceeds of this offering and the sale of the private placement warrants, and, as a result, if the cash portion of the purchase price exceeds the amount available from the trust account, net of amounts needed to satisfy any redemptions by public shareholders, we may be required to seek additional financing to complete such proposed initial business combination. We may also obtain financing prior to the closing of our initial business combination to fund our working capital needs and transaction costs in connection with our search for and completion of our initial business combination. There is no limitation on our ability to raise funds through the issuance of equity or equity-linked securities or through loans, advances or other indebtedness in connection with our initial business combination, including pursuant to forward purchase agreements or backstop agreements we may enter into following consummation of this offering. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial business combination. If we do not complete our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account. In addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until March 25, 2023 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date and an extension has not been requested by the Sponsor and approved by the Company’s stockholders, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur and an extension not requested by the Sponsor, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after July 11, 2023. The Company intends to continue to search for and seek to complete a Business Combination before the mandatory liquidation date. The Company is within 12 months of its mandatory liquidation date as of the time of filing of this Quarterly Report on Form 10-Q.
These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements; Commitments and Contractual Obligations; Quarterly Results
As of March 31, 2021,September 30, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations. No unaudited quarterly operating data is included in this prospectus as we have not conducted any operations to date.
Commitments and Contractual Obligations
As of September 30, 2022, we did not have any long-term debt, capital, or operating lease obligations.
Administrative Support Agreement
Commencing on the date its securities were first listed on the New York Stock Exchange, the Company agreed to pay the Sponsor $10,000 per month for office space, utilities, secretarial and administrative support services provided to members of the Company’s management team. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees.
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Registration Rights
The holders of the (i) founder shares, which were issued in a private placement prior to the closing of the IPO, (ii) Private Placement Warrants, which were issued in a private placement simultaneously with the closing of the IPO and the Class A ordinary shares underlying such Private Placement Warrants and (iii) Private Placement Warrants that may be issued upon conversion of working capital loans have registration rights to require the Company to register a sale of any of the Company’s securities held by them pursuant to a registration rights agreement signed on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter had a 45-day option from March 22, 2021 to purchase up to an aggregate of 3,750,000 additional Units at the public offering price less the underwriting commissions to cover over-allotments, if any. On March 26, 2021, the underwriter partially exercised its over-allotment option and purchased an additional 1,700,000 Units. As of December 31, 2021, the remaining over-allotment option has expired.
Upon consummation of the IPO on March 25, 2021 and settlement of the purchased over-allotment on March 30, 2021, the underwriter was paid a cash underwriting fee of 2.0% of the gross proceeds, or $5,340,000 in the aggregate.
The underwriter is entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the IPO and purchased over-allotment, or $9,345,000 in the aggregate. The deferred fee will be payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes an initial Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of unaudited condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Except as set forth below, there have been no significant changes in our critical accounting policies as discussed in the final prospectus filed by us with the SEC on March 22, 2021.
Warrant Liability
We evaluated the public warrants and private placement warrants in accordance with Accounting Standards Codification (“Codification(“ASC”)Topic 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” and concluded that a provision in our warrant agreement related to certain tender or exchange offers precludes the warrants from being accounted for as components of equity. As the warrants meet the definition of a derivative as contemplated in ASC 815, the warrants are recorded as derivative liabilities on the Condensed Balance Sheet and measured at fair value at inception (on the date of the IPO) and at each reporting date in accordance with ASC 820, “Fair Value Measurement”, with changes in fair value recognized in the Condensed Statement of Operations in the period of change.
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Class A Ordinary Shares Subject to Possible Redemption
We account for our ordinary shares subject to possible redemption in accordance with the guidance in ASC 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, ordinary shares is classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that is considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, 23,667,932 ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ equity section of our balance sheet.sheets. The dissolution expense of $100,000 is not included in the redemption value of the shares subject to redemption since it is only taken into account in the event of the Company’s liquidation.
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Net LossIncome Per Ordinary Share
We apply the two-class method in calculating earnings per share. Net income per ordinary share, basic and diluted for Class A redeemable ordinary shares is calculated by dividing the interest income earned on the Trust Account by the weighted average number of Class A redeemable ordinary shares outstanding since original issuance. Net lossincome per commonordinary share, basic and diluted for Class B non-redeemable ordinary shares is calculated by dividing the net income, (loss), less income attributable to Class A redeemable ordinary shares, by the weighted average number of Class B non-redeemable ordinary shares outstanding for the periods presented.
Our statement of income applies the two-class method in calculating net income per share. Basic and diluted net income per ordinary share for Class A ordinary shares and Class B ordinary shares is calculated by dividing net income attributable to the Company by the weighted average number of Class A ordinary shares and Class B ordinary shares outstanding, allocated proportionally to each class of shares.
Recent Accounting Standards
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”),which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company early adopted ASU 2020-06 on January 27, 2021 (inception). Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows.
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
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Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021.September 30, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due solely to the material weakness we have identified in our internal control over financial reporting described below our disclosure controls and procedures (as defined in Rules 13a-15 (e)and 15d-15 (e) under the Exchange Act) were not effective.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. We became aware of the need to change the classification of our warrants when the SEC Statement was issued on April 12, 2021. As a result, our management concluded that there was a material weakness related to the evaluation and review of complex accounting standards for equity transactions in internal control over financial reporting as of March 31, 2021.September 30, 2022. In light of the material weakness, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting as the circumstances that led to the errors in our financial statements described in this Quarterly Report had not yet been identified. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the accounting standards that apply to our financial statements, including through enhanced analyses by our personnel and third-party professionals with whom we consult regarding complex accounting applications. We can offer no assurance that our remediation plan will ultimately have the intended effects.
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PART II—OTHERII-OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS. |
None.
ITEM 1A. | RISK FACTORS. |
Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.
ASC 815 provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings (loss) in the statement of operations. As a result“smaller reporting company” as defined by Item 10 of Regulation S-K,the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes in fair value on earnings may have an adverse effect on the market price of our securities. In addition, potential targets may seek a special purpose acquisition company that doesCompany is not have warrants that are accounted for as a warrant liability, which may make it more difficult for us to consummate an initial business combination.
We have identified a material weakness in our internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Following the SEC Statement, and after consultation with our independent registered public accounting firm, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued audited balance sheet as of February 4, 2021 to account for our warrants as liabilities measured at fair value, rather than equity securities. As a result of these events, we have identified a material weakness in our internal control over financial reporting. See Part I, Item 4 “Controls and Procedures” of this Quarterly Report.
Effective internal controls are necessary for usrequired to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. If we identify any new material weakness in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and the price of our securities may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.information required by this Item.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
On March 25, 2021, we consummated our Initial Public Offering of 25,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share, $0.0001 par value per share and one-fourth of one redeemable warrant to purchase one Class A ordinary share. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to us of $250,000,000. We granted Citigroup Global Markets Inc., the underwriter in the Initial Public Offering (the “Underwriter”), a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments, if any. On March 26, 2021, the Underwriter partially exercised the over-allotment option to purchase an additional 1,700,000 units (the “Over-Allotment Units”), which purchase settled on March 30, 2021, generating gross proceeds of $17,000,000. Simultaneously with the closing of the exercise of the over-allotment option, the Company completed the private sale (the “Private Placement”) of an aggregate of 226,666 warrants (the “Private Placement Warrants”) to our sponsor at a purchase price of $1.50 per Private Placement Warrant, generating gross proceeds of $340,000, which was used to pay the underwriting discount of 2% of the over-allotment gross proceeds.
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The securities sold in our Initial Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-252913). The SEC declared the registration statement effective on March 22, 2021.
The Private Placement Warrants were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Private Placement Warrants are the same as the warrants underlying the Units sold in the Initial Public Offering, except that Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees.
Of the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $267,000,000 was placed in the Trust Account.
Transaction costs of the Initial Public Offering (including the partial exercise of the underwriter’s over-allotment option) amounted to $15,188,496 consisting of $5,340,000 of underwriting discount, $9,345,000 of deferred underwriting discount, and $503,496 of other offering costs.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
None.
ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
ITEM 5. | OTHER INFORMATION. |
None.
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ITEM 6. | EXHIBITS. |
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
* | Filed herewith. |
** | Furnished. |
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Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ROCKET INTERNET GROWTH OPPORTUNITIES CORP. | ||||||
Date: | /s/ Soheil Mirpour | |||||
Name: | Soheil Mirpour | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) |
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