☒ | 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 | 001-41312 | 98-1600571 | ||
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification No.) |
375 Park Avenue New York, New York | 10152 | |||
(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 ordinary share, par value $0.0001 per share, and one-half ofone redeemable warrant | SPCMU | The Nasdaq Stock Market LLC | ||
Class A ordinary shares, par value $0.0001 per share | SPCM | The Nasdaq Stock Market LLC | ||
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share, par value $0.0001 per share, at an exercise price of $11.50 per share | SPCMW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
SOUND POINT ACQUISITION CORP I, LTD
Form
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March 31, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 1,453,976 | $ | 25,000 | ||||
Total Current Assets | 1,453,976 | 25,000 | ||||||
Deferred offering costs | 0 | 237,659 | ||||||
Investments held in Trust Account | 266,529,853 | 0 | ||||||
TOTAL ASSETS | $ | 267,983,829 | $ | 262,659 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities | ||||||||
Accrued offering costs and expenses | $ | 400,598 | $ | 80,308 | ||||
Promissory note - related party | 0 | 171,257 | ||||||
Due to related party | 9,000 | 0 | ||||||
Total Current Liabilities | 409,598 | 251,565 | ||||||
Deferred underwriting fee payable | 9,056,250 | 0 | ||||||
Warrant liabilities | 15,640,213 | 0 | ||||||
Total Liabilities | 25,106,061 | 251,565 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; and 0 shares - at redemption value of $10.30 pershare at March 31, 2022 and December 31, 202 1 | 266,512,500 | 0 | ||||||
Shareholders’ Equity (Deficit): | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued or outstanding | 0 | 0 | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 0ne issued or outstanding (excluding 25,875,000 and 0shares subject to possible redemption) at March 31, 2022 and December 31, 2021, respectively | 0 | 0 | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,468,750 issued and outstanding | 647 | 647 | ||||||
Additional paid-in capital | 0 | 24,353 | ||||||
Accumulated deficit | (23,635,379 | ) | (13,906 | ) | ||||
Total Shareholders’ Equity (Deficit) | (23,634,732 | ) | 11,094 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ | 267,983,829 | $ | 262,659 | ||||
Formation and operating costs | $ | 91,077 | ||
Loss from operations | (91,077 | ) | ||
Other income: | ||||
Change in fair value of warrant liabilities | 533,537 | |||
Interest earned on investments held in Trust Account | 17,353 | |||
Total other income | 550,890 | |||
Net income | $ | 459,813 | ||
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 8,050,000 | |||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | 0.03 | ||
Weighted average shares outstanding, Class B non-redeemable ordinary shares | 6,468,750 | |||
Basic and diluted net income per share, Class B non-redeemable ordinary shares | $ | 0.03 | ||
March 31, 2023 | December 31, 2022 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 499,304 | $ | 623,257 | ||||
Prepaid expenses | 388,969 | 432,539 | ||||||
Total current assets | 888,273 | 1,055,796 | ||||||
Investments held in trust account | 273,307,147 | 270,415,819 | ||||||
TOTAL ASSETS | $ | 274,195,420 | $ | 271,471,615 | ||||
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities | ||||||||
Due to affiliate | $ | 40,000 | $ | 10,000 | ||||
Total current liabilities | 40,000 | 10,000 | ||||||
Deferred underwriting fee payable | 9,056,250 | 9,056,250 | ||||||
Warrant liabilities | 2,874,388 | 2,837,500 | ||||||
Total Liabilities | 11,970,638 | 11,903,750 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares subject to possible redemption, at $10.56 and $10.45 redemption value, $0.0001 par value; 25,875,000 shares at March 31, 2023 and December 31, 2022, respectively | 273,307,147 | 270,415,819 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding at March 31, 2023 and December 31, 2022 | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued or outstanding (excluding 25,875,000 shares subject to possible redemption at March 31, 2023 and December 31, 2022) | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,468,750 issued and outstanding at March 31, 2023 and December 31, 2022 | 647 | 647 | ||||||
Accumulated deficit | (11,083,012 | ) | (10,848,601 | ) | ||||
Total Shareholders’ Deficit | (11,082,365 | ) | (10,847,954 | ) | ||||
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | $ | 274,195,420 | $ | 271,471,615 | ||||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance - January 1, 2022 | 0 | $ | 0 | 6,468,750 | $ | 647 | $ | 24,353 | $ | (13,906 | ) | $ | 11,094 | |||||||||||||||
Sale of 25,875,000 Units, net of underwritting discounts, initial value of public warrants and other offering costs | 25,875,000 | 2,588 | 0 | 0 | 235,766,077 | — | 235,768,665 | |||||||||||||||||||||
Cash paid in excess of fair value of Private Placement Warrants | — | — | — | — | 6,638,196 | — | 6,638,196 | |||||||||||||||||||||
Class A ordinary shares subject to possible redemption | (25,875,000 | ) | (2,588 | ) | — | — | (242,428,626 | ) | (24,081,286 | ) | (266,512,500 | ) | ||||||||||||||||
Net income | — | — | — | — | — | 459,813 | 459,813 | |||||||||||||||||||||
Balance - March 31, 2022 (unaudited) | 0 | $ | 0 | 6,468,750 | $ | 647 | $ | 0 | $ | (23,635,379 | ) | $ | (23,634,732 | ) | ||||||||||||||
Three Months Ended | ||||||||
March 31, 2023 | March 31, 2022 | |||||||
Formation and operating costs | $ | 197,523 | $ | 91,077 | ||||
Loss from operations | (197,523 | ) | (91,077 | ) | ||||
Other income: | ||||||||
Change in fair value of warrant liabilities | (36,888 | ) | 533,537 | |||||
Earnings on investments held in Trust Account | 2,891,328 | 17,353 | ||||||
Total other income | 2,854,440 | 550,890 | ||||||
Net income | $ | 2,656,917 | $ | 459,813 | ||||
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 25,875,000 | 8,050,000 | ||||||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | 0.08 | $ | 0.03 | ||||
Weighted average shares outstanding, Class B ordinary shares | 6,468,750 | 6,468,750 | ||||||
Basic and diluted net income per share, Class B ordinary shares | $ | 0.08 | $ | 0.03 | ||||
THREE MONTHS ENDED MARCH 31, 2022 AND MARCH 31, 2023 | ||||||||||||||||||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity (Deficit) | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance – December 31, 2021 | — | $ | — | 6,468,750 | $ | 647 | $ | 24,353 | $ | (13,906 | ) | $ | 11,094 | |||||||||||||||
Sale of 25,875,000 Units, net of discounts, initial value of public warrants and | 25,875,000 | 2,588 | — | — | 235,766,077 | — | 235,768,665 | |||||||||||||||||||||
Cash paid in excess of fair value of Private Placement Warrants | — | — | — | — | 6,638,196 | — | 6,638,196 | |||||||||||||||||||||
Class A ordinary shares subject to possible redemption | (25,875,000 | ) | (2,588 | ) | — | — | (242,428,626 | ) | (24,081,286 | ) | (266,512,500 | ) | ||||||||||||||||
Net income | — | — | — | — | — | 459,813 | 459,813 | |||||||||||||||||||||
Balance – March 31, 2022 | — | $ | — | 6,468,750 | $ | 647 | $ | — | $ | (23,635,379 | ) | $ | (23,634,732 | ) | ||||||||||||||
Balance – December 31, 2022 | — | $ | — | 6,468,750 | $ | 647 | $ | — | $ | (10,848,601 | ) | $ | (10,847,954 | ) | ||||||||||||||
Accretion of Class A ordinary shares to Redemption Value | — | — | — | — | — | (2,891,328 | ) | (2,891,328 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 2,656,917 | 2,656,917 | |||||||||||||||||||||
Balance – March 31, 2023 | — | $ | — | 6,468,750 | $ | 647 | $ | — | $ | (11,083,012 | ) | $ | (11,082,365 | ) | ||||||||||||||
Cash Flows from Operating Activities: | ||||
Net income | $ | 459,813 | ||
Adjustment to reconcile net income to net cash used in operating activities: | ||||
Interest earned on investments held in Trust Account | (17,353 | ) | ||
Change in fair value of warrant liabilities | (533,537 | ) | ||
Changes in operating assets and liabilities | ||||
Due to related party | 9,000 | |||
Net cash used in operating activities | (82,077 | ) | ||
Cash Flows from Investing Activities: | ||||
Investment of cash in Trust Account | (266,512,500 | ) | ||
Net cash used in investing activities | (266,512,500 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from sale of Units, net of underwriting discounts paid | 253,575,000 | |||
Proceeds from sale of Private Placement Warrants | 15,437,500 | |||
Payment of promissory note - related party | (300,000 | ) | ||
Payment of offering cost | (688,947 | ) | ||
Net cash provided by financing activities | 268,023,553 | |||
Net Change in Cash | 1,428,976 | |||
Cash - Beginning of period | 25,000 | |||
Cash - End of period | $ | 1,453,976 | ||
Non-cash investing and financing activities: | ||||
Deferred underwriting fee payable | $ | 9,056,250 | ||
Offering cost included in accrued offering costs and expenses | $ | 320,290 | ||
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 2,656,917 | $ | 459,813 | ||||
Adjustment to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
Accrued earnings on investments held in Trust Account | (170,591 | ) | (17,353 | ) | ||||
Change in fair value of warrant liabilities | 36,888 | (533,537 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 43,570 | — | ||||||
Due to affiliate | 30,000 | 9,000 | ||||||
Net cash provided by (used in) operating activities | 2,596,784 | (82,077 | ) | |||||
Cash Flows from Investing Activities: | ||||||||
Investment of cash in Trust Account | (2,720,737 | ) | (266,512,500 | ) | ||||
Net cash used in investing activities | (2,720,737 | ) | (266,512,500 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from sale of Units, net of underwriting discounts paid | — | 253,575,000 | ||||||
Proceeds from sale of Private Placement Warrants | — | 15,437,500 | ||||||
Payment of promissory note - related party | — | (300,000 | ) | |||||
Payment of offering costs | — | (688,947 | ) | |||||
Net cash provided by financing activities | — | 268,023,553 | ||||||
Net Change in Cash | (123,953 | ) | 1,428,976 | |||||
Cash - Beginning of period | 623,257 | 25,000 | ||||||
Cash - End of period | $ | 499,304 | $ | 1,453,976 | ||||
Non-cash investing and financing activities: | ||||||||
Deferred underwriting fee payable | $ | — | $ | 9,056,250 | ||||
Deferred offering costs included in promissory note – related party | $ | — | $ | 128,743 | ||||
Class A | Class B | |||||||
Numerator: | ||||||||
Allocation of net income | $ | 265,578 | $ | 194,235 | ||||
Denominator: | ||||||||
Weighted average shares outstanding | 8,050,000 | 6,468,750 | ||||||
Basic and diluted net income per share | $ | 0.03 | $ | 0.03 | ||||
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 2,125,534 | $ | 531,383 | $ | 265,578 | $ | 194,235 | ||||||||
Denominator: | ||||||||||||||||
Weighted average shares outstanding | 25,875,000 | 6,468,750 | 8,050,000 | 6,468,750 | ||||||||||||
Basic and diluted net income per share | $ | 0.08 | $ | 0.08 | $ | 0.03 | $ | 0.03 | ||||||||
March 31, 2023 | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Investments held in the Trust Account | $ | 273,307,147 | $ | 273,307,147 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Private placement warrants | $ | 1,563,819 | $ | — | $ | 1,563,819 | $ | — | ||||||||
Public warrants | 1,310,569 | — | 1,310,569 | — | ||||||||||||
Total liabilities measured at fair value | $ | 2,874,388 | $ | — | $ | 2,874,388 | $ | — | ||||||||
December 31, 2022 | ||||||||||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Investments held in the Trust Account | $ | 270,415,819 | $ | 270,415,819 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Private placement warrants | $ | 1,543,750 | $ | — | $ | 1,543,750 | $ | — | ||||||||
Public warrants | 1,293,750 | — | 1,293,750 | — | ||||||||||||
Total liabilities measured at fair value | $ | 2,837,500 | $ | — | $ | 2,837,500 | $ | — | ||||||||
Carrying Value | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Investments held in Trust Account | $ | 266,529,853 | $ | 266,529,853 | $ | — | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Private placement warrants | $ | 8,524,588 | $ | — | $ | — | $ | 8,524,588 | ||||||||
Public warrants | 7,115,625 | — | — | 7,115,625 | ||||||||||||
Total liabilities measured at fair value | $ | 15,640,213 | $ | — | $ | — | $ | 15,640,213 | ||||||||
Risk-free interest rate | 2.41 | % | ||
Time to maturity (years) | 5.59 | |||
Volatility before initial Business Combination | 5.0 | % | ||
Volatility after initial Business Combination | 7.5 | % | ||
Exercise price | $ | 11.50 | ||
Underlying share price | $ | 9.79 | ||
Dividend yield Volatility (private placement warrants) | | 0 7.0 | % % |
Private Placement Warrants | Public Warrants | |||||||
Fair value as of March 4, 2022 (IPO) | $ | 8,799,375 | $ | 7,374,375 | ||||
Change in valuation inputs or other assumptions | (274,787 | ) | (258,750 | ) | ||||
Fair value as of March 31, 2022 | $ | 8,524,588 | $ | 7,115,625 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “Sound Point Acquisition Corp I, Ltd,” “our,” “us” or “we” refer to Sound Point Acquisition Corp I, Ltd. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
Overview
We are a blank check company incorporated on May 4, 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 or entities (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
Our sponsor is Sound Point Acquisition Sponsor I, LLC, a Delaware limited liability company (the “Sponsor”). The registration statements for our initial public offering (“Initial Public Offering”) became effective on March 1, 2022. On March 4, 2022, we consummated our Initial Public Offering of 25,875,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including 3,375,000 additional Units to cover over-allotments, at $10.00 per Unit, generating gross proceeds of $258,750,000, and incurring offering costs of approximately $15.7 million, of which approximately $9.1 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, pursuant to the Private Placement Warrants Purchase Agreement between the Company and the Sponsor, dated March 1, 2022, the Company completed the private sale of 15,437,500 warrants to the Sponsor (the “Private Placement”), at a purchase price of $1.00 per private placement warrant (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), generating gross proceeds to the Company of $15,437,500.
Upon the closing of the Initial Public Offering and the Private Placement, a total of $266,512,500, comprised of $253,575,000 of the proceeds from the Initial Public Offering and $12,937,500 of the proceeds from the sale of the Private Placement Warrants, was placed in a U.S.-based trust account at J.P. Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee (the “Trust Account”), and has been invested only in U.S. “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule
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commissions and taxes payable on the interest earned on the Trust Account). We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, we will only complete such Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target business or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that we will be able to complete an initial Business Combination successfully.
If we have not consummated an initial Business Combination within 15 months from the closing of the Initial Public Offering (or up to 21 months, if we extend the time to complete a Business Combination as described in our prospectus relating to the Initial Public Offering (the “Prospectus”) filed with the SEC on March 3, 2022), we 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 Capital Resources
As of March 31, 2023 and December 31, 2022, we had approximately $1.5 million$500,000 and $620,000 in our operating bank account, and working capital of approximately $1.1 million.
Our liquidity needs to date have been satisfied through (i) $25,000 paid by our sponsorSponsor for the issuance of Class B ordinary shares to our sponsor andSponsor, (ii) the receipt of loans to us of up to $300,000 by our sponsorSponsor under a promissory note (the “Promissory Note”)., and (iii) working capital related party loans of $129,000. Loans under the Promissory Note were
Based on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Results of Operations
Our entire activity since inception up to the consummation of our Initial Public Offering on March 4, 2022 was in preparation for our Initial Public Offering, and since our Initial Public Offering through March 31, 2022,2023, our business activities have been limited to the search for prospective initial Business Combination targets. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate
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For the three months ended March 31, 2023, we had net income of approximately $2.7 million, which was primarily comprised of earnings on the investments held in the Trust Account of approximately $2.9 million, net of decrease in warrant liabilities, formation and operating costs. For the three months ended March 31, 2022, we had a net income of approximately $460,000, which was primarily comprised of an increase in the fair value of warrant liabilities net of formation and operating costs.
Contractual Obligations
Registration Rights
The holders of Class B ordinary shares, Private Placement Warrants and any warrants that may be issued upon conversion of working capital or extension 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 such loans) are entitled to registration rights pursuant to a registration rights agreement signed upon consummation of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, these holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial Business Combination. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the Class B ordinary shares, as described in the following paragraph, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Pursuant to the forward purchase agreements,Forward Purchase Agreements (as defined below), we agreed that we will use our commercially reasonable efforts to (i) within 30 days after the closing of the initial Business Combination, file a registration statement with the SEC for the resale of (A) the forward purchaser’s forward purchase sharesForward Purchase Shares (as defined below) and (B) any other equity security of ours issued or issuable with respect to the securities referred to in clause (A) by way of a share capitalization or share split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization, (ii) cause such registration statement to be declared effective promptly thereafter, but in no event later than 90 days after the closing of the initial Business Combination and (iii) maintain the effectiveness of such registration statement, until the earlier of (A) the date on which such securities are no longer registrable securities under the forward purchase agreementsForward Purchase Agreements and (B) the date all of the registrable securities covered by the registration statement can be sold publicly without restriction or limitation under Rule 144 under the Securities Act and without the requirement to be in compliance with Rule 144(c)(1) under the Securities Act, subject to certain conditions and limitations set forth in the forward purchase agreements.Forward Purchase Agreements. We will bear the cost of registering these securities.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per Unit, or approximately $5.2 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35 per Unit, or approximately $9.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
The underwriters have agreed to waive their rights to their deferred underwriting commission held in the Trust Account in the event the Company does not consummate an initial Business Combination within 15 months from the closing of the Initial Public Offering (or up to 21 months, if the Company extends the time to complete a Business Combination as described in more detail in the Prospectus) and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.
Forward Purchase Agreements
In connection with the consummation of the Initial Public Offering, the Company entered into two separate forward purchase agreements (the “Forward Purchase Agreements”) with certain affiliates of the Sponsor (the “Forward Purchasers”), pursuant to which the Forward Purchaser committed to purchase from the Company an aggregate of $50.0 million of Class A ordinary shares (the “Forward Purchase Shares”), at a price of $10.00 per share, in a private
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placement that will close concurrently with the closing of the initial Business Combination. The proceeds from the sale of the Forward Purchase Shares, together with the amounts available to the Company from the Trust Account (after giving effect to any redemptions of Public Shares) and any other equity or debt financing obtained by the Company in connection with the Business Combination, will be used to satisfy the cash requirements of the Business Combination, including funding the purchase price, paying expenses and retaining specified amounts to be used by the post-Business Combination company for working capital or other purposes. The Forward Purchase Shares will be identical to the Public Shares, except they will be subject to certain
Critical Accounting Policies
The preparation of 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:
Warrant Liabilities
The Company accounts for outstanding Warrants in accordance with the guidance contained in ASC
For issued or modified warrants that meet all of the criteria for equity classifications, the warrants are required to be recorded as a component of additional
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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 elected 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
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 of the Sarbanes-Oxley Act of 2002, (ii) provide all of the compensation disclosure that may be required of
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2022,2023, as such term is defined in Rules
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 20222023 covered by this Quarterly Report on Form
PART II - II—OTHER INFORMATION
Item 1. Legal Proceedings.
None.
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Item 1A. Risk Factors.
As of the date of this Quarterly Report on
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Simultaneously with the closing of the Initial Public Offering, we consummated the Private Placement of 15,437,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant with the Sponsor, generating gross proceeds of $15,437,500.
In connection with the Initial Public Offering, the Sponsor agreed to loan us an aggregate of up to $300,000 pursuant to the Promissory Note. Loans under the Promissory Note were
Of the gross proceeds received from the Initial Public Offering and the full exercise of the option to purchase additional Units, $266,512,500 was placed in the Trust Account. The net proceeds of $253,575,000 received upon the consummation of the Initial Public Offering and $12,937,500 of the proceeds from the Private Placement are invested in U.S. government securities within the meaning of Section 2(a)16 of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under
We paid a total of approximately $5.2 million in underwriting discounts and commissions related to the Initial Public Offering. In addition, the underwriters agreed to defer $9.1 million in underwriting discounts and commissions.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
101.INS | Inline XBRL Instance |
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Exhibit | Description | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Filed herewith. |
** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURE
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 hereunto duly authorized.
SOUND POINT ACQUISITION CORP I, LTD | ||||||
Date: May | By: | /s/ David Grill | ||||
Name: | David Grill | |||||
Title: | Chief Financial Officer | |||||
(Authorized Signatory and Principal Financial Officer) |
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