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 |
Cayman Islands | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
955 Fifth Avenue New York, New York | 10075 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||
Units, each consisting of one Class A one-third of one redeemable warrant | SCRMU | The Nasdaq Stock Market LLC | ||
Class A ordinary shares, 0.0001 par value | SCRM | The Nasdaq Stock Market LLC | ||
Warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per share | SCRMW | The Nasdaq Stock Market LLC |
Large accelerated filer | Accelerated filer | |||||||||||
Non-accelerated filer | Smaller reporting company | |||||||||||
Emerging growth company |
SCREAMING EAGLE ACQUISITION CORP.
FORM
TABLE OF CONTENTS
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Item 3. Quantitative and Qualitative Disclosures | ||||||
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24 | ||||||
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 24 | |||||
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26 |
September 30, 2022 (unaudited) | December 31, 2021 | |||||||
ASSETS: | ||||||||
Current assets: | ||||||||
Cash | $ | 79,053 | $ | — | ||||
Prepaid expenses | 752,116 | — | ||||||
Total current assets | 831,169 | — | ||||||
Deferred offering costs | — | 787,938 | ||||||
Cash and investments held in Trust Account | 753,540,845 | — | ||||||
Total assets | $ | 754,372,014 | $ | 787,938 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY ( DEFICIT ) : | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 296,338 | $ | 453,401 | ||||
Promissory note - related party | — | 300,000 | ||||||
Due to Sponsor | — | 14,537 | ||||||
Total current liabilities | 296,338 | 767,938 | ||||||
Warrant liability | 2,581,333 | — | ||||||
Deferred underwriting compensation | 26,250,000 | — | ||||||
Total liabilities | 29,127,671 | 767,938 | ||||||
Commitments and contingencies | ||||||||
Class A ordinary shares subject to possible redemption; redemption value | 753,332,018 | — | ||||||
Shareholders’ equity (deficit): | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; no | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 400,000,000 shares authorized; no nonredeemable issued or outstanding (excluding 75,000,000 shares subject to possible redemption) shares | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 80,000,000 shares authorized; 18,750,000 and 21,562,500 shares issued and outstanding as of September 30, 2022 (2) (1) , respectively | 1,875 | 2,156 | ||||||
Additional paid-in capital | — | 22,844 | ||||||
Accumulated deficit | (28,089,550 | ) | (5,000 | ) | ||||
Total shareholders’ equity ( deficit) | (28,087,675 | ) | 20,000 | |||||
Total liabilities, and shareholders’ equity ( deficit ) | $ | 754,372,014 | $ | 787,938 | ||||
2022 | 2021 | |||||||||||||||
(1) | Shares and the associated amounts have been retroactively adjusted to reflect the issuance of 4,312,500 Class B ordinary shares in a share recapitalization on December 13, |
(2) | ||||
Ordinary Shares | Deficit | Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||||
surrender of 2,812,500 Class B ordinary shares for no consideration on February 19, 2022 (see Note 5). |
For the Three months ended September 30, 2022 | For the Nine months ended September 30, 2022 | |||||||
Operating costs | $ | 411,769 | $ | 1,204,953 | ||||
Loss from operations | (411,769 | ) | (1,204,953 | ) | ||||
Other income (expense): | ||||||||
Interest income from investments held in Trust Account | 3,235,822 | 3,540,845 | ||||||
Warrant issuance transaction costs | — | (20,182 | ) | |||||
Change in fair value of warrant liability | 2,464,000 | 14,901,333 | ||||||
Net income | $ | 5,288,053 | $ | 17,217,043 | ||||
Weighted average number of Class A ordinary shares subject to possible redemption outstanding | 75,000,000 | 72,500,000 | ||||||
Basic and diluted net income per share, Class A ordinary shares subject to redemption | $ | 0.06 | $ | 0.19 | ||||
Weighted average number of Class B ordinary shares outstanding (1) | 18,750,000 | 18,750,000 | ||||||
Basic and diluted net income per share, Class B ordinary shares | $ | 0.06 | $ | 0.19 | ||||
(1) | Shares and the associated amounts have been retroactively adjusted to reflect the issuance of 4,312,500 Class B ordinary shares in a share recapitalization on December 13, 2021 of 2,812,500 Class B ordinary shares for no consideration on February 19, 2022 (see Note 5).and the surrender |
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2021 (1) | — | $ | — | 21,562,500 | $ | 2,156 | $ | 22,844 | $ | (5,000 | ) | $ | 20,000 | |||||||||||||||
Forfeiture of Class B shares (2) | — | — | (2,812,500 | ) | (281 | ) | 281 | — | — | |||||||||||||||||||
Cash received in excess of fair value of private warrants | — | — | — | — | 117,334 | — | 117,334 | |||||||||||||||||||||
Fair value of public warrants at issuance | — | — | — | — | 36,750,000 | — | 36,750,000 | |||||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | (36,890,459 | ) | (41,969,575 | ) | (78,860,034 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 9,876,745 | 9,876,745 | |||||||||||||||||||||
Balance at March 31, 2022 | — | — | 18,750,000 | 1,875 | — | (32,097,830 | ) | (32,095,955 | ) | |||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (305,023 | ) | (305,023 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 2,052,245 | 2,052,245 | |||||||||||||||||||||
Balance at June 30, 2022 | — | — | 18,750,000 | 1,875 | — | (30,350,608 | ) | (30,348,733 | ) | |||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (3,026,995 | ) | (3,026,995 | ) | |||||||||||||||||||
Net inc o me | — | — | — | — | — | 5,288,053 | 5,288,053 | |||||||||||||||||||||
Balance at September 30, 2022 | — | $ | — | 18,750,000 | $ | 1,875 | $ | — | $ | (28,089,550 | ) | $ | (28,087,675 | ) | ||||||||||||||
(1) | ||||
to | ||||
reflect the issuance of 4,312,500 | ||||
a share recapitalization on December 13, 2021 | ||||
Reflects the surrender of 2,812,500 Class B ordinary shares for no consideration on February 19, 2022 (see Note 5). | ||||
Cash flows from operating activities: | ||||
Net income | $ | 17,217,043 | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Interest income from investments held in Trust Account | (3,540,845 | ) | ||
Change in fair value of warrant liability | (14,901,333 | ) | ||
Warrant issuance transaction costs | 20,182 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (752,116 | ) | ||
Accounts payable and accrued expenses | 296,338 | |||
Net cash used in operating activities | (1,660,731 | ) | ||
Cash flows from investing activities: | ||||
Principal deposited in Trust Account | (750,000,000 | ) | ||
Net cash used in investing activities | (750,000,000 | ) | ||
Cash flows from financing activities: | ||||
Proceeds from private placement of warrants | 17,600,000 | |||
Proceeds from sale of units in initial public offering | 750,000,000 | |||
Payment of underwriters’ discount | (15,000,000 | ) | ||
Payment of offering costs | (545,679 | ) | ||
Repayment of advances from Sponsor | (14,537 | ) | ||
Repayment of promissory note - related party | (300,000 | ) | ||
Net cash provided by financing activities | 751,739,784 | |||
Net change in cash | 79,053 | |||
Cash at beginning of period | — | |||
Cash at end of period | $ | 79,053 | ||
Supplemental disclosure of non-cash investing and financing activities: | ||||
Deferred underwriting fee payable | $ | 26,250,000 | ||
Forfeiture of Class B shares for no consideration | $ | 281 | ||
Gross proceeds | $ | 750,000,000 | ||
Less | ||||
Fair value of Public Warrants at issuance | (36,750,000 | ) | ||
Class A ordinary share issuance costs | (42,110,034 | ) | ||
Plus: | ||||
Accretion of carrying value to redemption value | 82,192,052 | |||
Class A ordinary shares subject to possible redemption | $ | 753,332,018 | ||
Three Months Ended September 30, 2022 | Nine Months Ended September 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per ordinary | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 4,230,442 | $ | 1,057,611 | $ | 13,679,294 | $ | 3,537,749 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average shares outstanding | 75,000,000 | 18,750,000 | 72,500,000 | 18,750,000 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | $ | 0.06 | $ | 0.06 | $ | 0.19 | $ | 0. 19 |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Carrying Value | Gross Unrealized Holding (Loss) | Quoted Prices in Active Markets (Level 1) | ||||||||||
U.S. Government Treasury Securities as of September 30, 2022 (1) | $ | 752,618,417 | $ | 342,789 | $ | 752,961,206 |
(1) | ||||||||||||
Unrealized Holding (Loss) | in Active Markets (Level 1) | |||||||||||
Maturity date |
(1) | in whole and not in part; |
(2) | at a price of $0.01 per Public Warrant; |
(3) | upon not less than 30 |
(4) | if, and only if, the reported closing price of the ordinary shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a30-trading day period ending three business days before the Company send to the notice of redemption to the warrant holders. |
(Level 1) | (Level 2) | (Level 3) | ||||||||||
Private placement warrants | $ | — | $ | — | $ | 2,581,333 |
January 10, 2022 | September 30, 2022 | |||||||
Ordinary share price | $ | 9.44 | $ | 9.67 | ||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Volatility | 24.5 | % | 13.0 | % (1) | ||||
Term | 6.33 | 5.62 | ||||||
Risk-free rate | 1.7 | % | 4.0 | % | ||||
Dividend yield | 0 | % | 0 | % | ||||
Probability of completing Business Combination | 76 | % (2) | 16 | % (3) |
(1) | ||||||||
2022 | ||||||||
The change in the fair value of the warrant liabilities for the nine months ended 30, 2022is summarized as follows:
Note 11-Subsequent EventsThe Company evaluated subsequent events and transactions that occurred after the balance sheet date up to Subsequent to September 30, 2022, the Company withdrew $250,000 of interest earned on the Trust Account for working capital.17 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS References in this report (the Special Note Regarding Forward-Looking Statements This Quarterly Report includes Overview We are a blank check company incorporated on November 3, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Our efforts to identify a prospective initial business combination target will not be limited to a particular industry, sector or geographic region. While we may pursue an initial business combination opportunity in any industry or sector, we intend to capitalize on the ability of our management team to identify and combine with a business or businesses that can benefit from our management We intend to effectuate our initial business combination using cash from the proceeds of 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 the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, other securities issuances, or a combination of the foregoing. The issuance of additional shares in connection with a business combination to the owners of the target or other investors:
may subordinate the rights of holders of Class A ordinary shares if preferred shares are issued with rights senior to those afforded our Class A ordinary shares; could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. 18 Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in: default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; our inability to pay dividends on our Class A ordinary shares; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. As indicated in the accompanying financial statements, at Results of Operations We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the Initial Public Offering. We will not generate any operating revenues until after completion of our initial business combination. We have generated non-operating income in the form of interest income on cash and cash equivalents after the Initial Public Offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. 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.For the three months ended Through 19 Liquidity and Capital Resources As of On January 10, 2022, the Company consummated the Initial Public Offering of 75,000,000 units at $10.00 per unit and a private sale of 11,733,333 private placement warrants at a purchase price of $1.50 per warrant. A total of $750,000,000 comprised of $735,000,000 of the proceeds from the Initial Public Offering (which amount includes $26,250,000 of the 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. We will use the funds held outside the trust account to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a business combination. In addition, the Company is permitted to 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. We expect our primary liquidity requirements during that period to include approximately $416,000 for legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations, $360,000 for administrative and support services, and approximately $224,000 for Nasdaq and other regulatory fees and approximately $850,000 for director and officer liability insurance premiums. We will also reimburse an affiliate of our Sponsor for office space and administrative services provided to members of our management team in an amount not to exceed $15,000 per month in the event such space and/or services are utilized and we do not pay a third party directly for such services. These amounts are estimates and may differ materially from our actual expenses. In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a 20 although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a 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 the Initial Public Offering and the sale of the private placement units, 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 the Initial Public 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 are unable to 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. Commitments and Contractual Obligations; Quarterly Results We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. No unaudited quarterly operating data is included in this Quarterly Report as we have not conducted any operations to date. Administrative Services and Indemnification Fee On January 5, 2022, the Company entered into an Administrative Services and Indemnification Agreement. We agreed to pay an affiliate of our Sponsor $15,000 per month for office space, utilities, secretarial and administrative support services and to provide indemnification to the Sponsor from any claims arising out of or relating to the Initial Public Offering or the Underwriting Agreement On January 5, 2022, the Company entered into an Underwriting Agreement. The underwriters were paid a cash underwriting discount of two percent (2.0%) of the gross proceeds of the Initial Public Offering, or $15,000,000. Additionally, the underwriters will be entitled to a deferred underwriting commission of 3.5% or $26,250,000 of the gross proceeds of the Initial Public Offering held in the Trust Account upon the completion of the 21 Registration Rights Agreement The holders of the founder shares, private placement warrants, warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the exercise of the private placement warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of this offering, requiring us to register such securities and any of our other securities they hold or acquire prior to the consummation of our initial business combination for resale. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain Critical Accounting Policies The preparation of financial statements and related disclosures in conformity with GAAP 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 Class A Ordinary Shares Subject to Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of Class A ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit. Recent Accounting Standards Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. 22 ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized, and reported within the time period specified in the Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Management’s Report on Internal Controls Over Financial Reporting This Quarterly Report does not include a report of Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of 23 PART II ITEM 1. LEGAL PROCEEDINGS. We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity. ITEM 1A. RISK FACTORS. Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on March 28, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.As of the date of this Quarterly Report, other than as set forth below, there have been no material changes to the risk factors disclosed in Annual Report on Form 10-K filed with the SEC on March 28, 2022.If we are deemed to be an investment company for purposes of the Investment Company Act, we may On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”), relating, among other things, to circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Rule Proposals would provide a safe harbor for such companies from the definition of “investment company” under Section 3(a)(1)(A) of the There is currently uncertainty concerning the applicability of the Investment Company Act to a SPAC, including a company like ours, that does not complete its initial business combination within the proposed time frame set forth in the proposed safe harbor rule. As indicated above, we completed our Initial Public Offering in January 10, 2022 and have operated as a blank check company searching for a target business with which to consummate an initial business combination since such time (or approximately ten months after the effective date of our Initial Public Offering, as of the date of this Quarterly Report). If we were deemed to be an investment company for purposes of the Investment Company Act, we might be forced to abandon our efforts to complete an initial business combination and instead be required to liquidate the Company. If we are required to liquidate the Company, our investors would not be able to realize the benefits of owning shares in a successor operating business, including the potential appreciation in the value of our shares and warrants following such a transaction, and our warrants would expire worthless. The funds in the Trust Account have, since our Initial Public Offering, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. As of September 30, 2022, amounts held in Trust Account included approximately $3,540,845 of accrued interest. To mitigate the risk of us being deemed to have been operating as an unregistered investment company under the Investment Company Act, we may, on or prior to the 24-month anniversary of the effective date of the registration statement relating to our Initial Public Offering, or January In addition, even prior to the 24-month anniversary of the effective date of the registration statement relating to our Initial Public Offering, we our liquidation. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. ITEM 5. OTHER INFORMATION. None. 24 ITEM 6. EXHIBITS The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q
25 PART III SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 10, 2022
26 |