☒ | 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 | 98-1582153 | |
(State or | (I.R.S. Employer Identification No.) |
4318 Forman Ave | |||
Toluca Lake, CA 91602 | 91602 | ||
(Address of | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one Class A one-half of one redeemable warrant | IVCPU | The Nasdaq Stock Market LLC | ||
Class A | IVCP | The Nasdaq Stock Market LLC | ||
the units, | IVCPW | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
SWIFTMERGE ACQUISITION CORP.
Form 10-Q/A
For the Quarter Ended March 31, 2023
TABLE OF CONTENTS
Page | |||||||
1 | |||||||
1 | |||||||
Item 4. | |||||||
24 | |||||||
26 | |||||||
26 | |||||||
28 |
March 31, 2022 | December 31, 2021 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 677,466 | $ | 875,831 | ||||
Prepaid expenses | 974,527 | 1,075,033 | ||||||
Total current assets | 1,651,993 | 1,950,864 | ||||||
Investments held in Trust Account | 227,272,023 | 202,000,481 | ||||||
TOTAL ASSETS | $ | 228,924,016 | $ | 203,951,345 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 20,655 | $ | 33,057 | ||||
Accrued offering costs | 320,185 | 320,185 | ||||||
Due to Sponsor | 2,284 | 2,284 | ||||||
Accrued expenses | 216,311 | 79,875 | ||||||
Accrued expenses - related party | 3,000 | 0 | ||||||
Total current liabilities | 562,435 | 435,401 | ||||||
Deferred underwriting fee payable | 7,875,000 | 7,000,000 | ||||||
Total liabilities | 8,437,435 | 7,435,401 | ||||||
Commitments and Contingencies (Note 6) | 0 | 0 | ||||||
Class A ordinary shares subject to possible redemption, 22,500,000 and 20,000,000 shares at redemption value of $10.10 at March 31, 2022 and December 31, 2021, respectivel y | 227,250,000 | 202,000,000 | ||||||
Shareholders’ Deficit | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding | 0 | 0 | ||||||
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; 0 shares issued and outstanding ( e xcluding 22,500,000 and 20,000,000 shares subject to possible redemption at March 31, 2022 and December 31, 2021, respectively) | 0 | 0 | ||||||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,625,000 and5,750,000 issued and outstanding at March 31, 2022 and December 31, 2021, respectively (1) | 562 | 575 | ||||||
Additional paid-in capital | 0 | 0 | ||||||
Accumulated deficit | (6,763,981 | ) | (5,484,631 | ) | ||||
Total Shareholders’ Deficit | (6,763,419 | ) | (5,484,056 | ) | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT | $ | 228,924,016 | $ | 203,951,345 | ||||
Three Months Ended March 31, 2022 | For the Period From February 3, 2021 (Inception) Through March 31, 2021 | |||||||
Formation and operating costs | $ | 425,905 | $ | 6,728 | ||||
Loss from operations | (425,905 | ) | (6,728 | ) | ||||
Loss on sale of Private Placement Warrants | (30,000 | ) | — | |||||
Gain on investments held in Trust Account | 21,542 | — | ||||||
Net loss | $ | (434,363 | ) | $ | (6,728 | ) | ||
Basic and diluted weighted average shares outstanding, Class A ordinary shares | 22,000,000 | — | ||||||
Basic and diluted net loss per share, Class A ordinary shares | $ | (0.02 | ) | $ | — | |||
Basic and diluted weighted average shares outstanding, Class B ordinary shares | 5,500,000 | 5,000,000 | ||||||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.02 | ) | $ | (0.00 | ) | ||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2021 | 0 | $ | 0 | 5,750,000 | $ | 575 | $ | 0 | $ | (5,484,631 | ) | $ | (5,484,056 | ) | ||||||||||||||
Proceeds from Initial Public Offering allocated to Public Warrants, net of offering costs | — | — | — | — | 1,181,250 | — | 1,181,250 | |||||||||||||||||||||
Issuance of Private Placement Warrants | — | — | — | — | 780,000 | — | 780,000 | |||||||||||||||||||||
Forfeiture of Class B Shares by Sponsor | — | — | (125,000 | ) | (13 | ) | — | 13 | — | |||||||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | — | — | — | (1,961,250 | ) | (845,000 | ) | (2,806,250 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (434,363 | ) | (434,363 | ) | |||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Balance at March 31, 2022 | 0 | $ | 0 | 5,625,000 | $ | 562 | $ | 0 | $ | (6,763,981 | ) | $ | (6,763,419 | ) | ||||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholder’s Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at February 3, 2021 (inception) | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||
Issuance of Class B ordinary shares to Sponsor (1) | — | — | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (6,728 | ) | (6,728 | ) | |||||||||||||||||||
Balance at March 31, 2021 | 0 | $ | 0 | 5,750,000 | $ | 575 | $ | 24,425 | $ | (6,728 | ) | $ | 18,272 | |||||||||||||||
March 31, 2023 (As Restated) | December 31, 2022 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 179,750 | $ | 461,914 | ||||
Prepaid expenses | 431,833 | 514,200 | ||||||
Total current assets | 611,583 | 976,114 | ||||||
Investments held in Trust Account | 232,121,440 | 229,792,494 | ||||||
TOTAL ASSETS | $ | 232,733,023 | $ | 230,768,608 | ||||
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 21,747 | $ | 51,453 | ||||
Accrued offering costs | 311,430 | 311,430 | ||||||
Due to Sponsor | 2,284 | 2,284 | ||||||
Accrued expenses | 1,388,062 | 504,181 | ||||||
Accrued expenses—related party | 43,516 | 43,516 | ||||||
Total current liabilities | 1,767,039 | 912,864 | ||||||
Deferred underwriting fee payable (1) | — | — | ||||||
Total liabilities (1) | 1,767,039 | 912,864 | ||||||
Commitments and Contingencies (Note 7) | ||||||||
Class A ordinary shares subject to possible redemption , $0.0001 par value; 22,500,000 shares issued and outstanding atredemption value of $10.31 and $10.21, respectively. | 232,021,440 | 229,692,494 | ||||||
Shareholders’ (Deficit) Equity | ||||||||
Preference 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; no shares issued and outstanding (excluding 22,500,000 shares subject to possible redemption as of March 31, 2023 and December 31, 2022) | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,625,000 issued and outstanding as of March 31, 2023 and December 31, 2022 | 562 | 562 | ||||||
Additional paid-in capital | — | — | ||||||
(Accumulated deficit) Retained earnings (1) | (1,056,018 | ) | 162,688 | |||||
Total Shareholders’ (Deficit) Equity (1) | (1,055,456 | ) | 163,250 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY | $ | 232,733,023 | $ | 230,768,608 | ||||
Three Months Ended March 31, 2022 | For the period from February 3, 2021 (inception) through March 31, 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (434,363 | ) | $ | (6,728 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Payment of formation and operating costs through due to related party | 0 | 6,268 | ||||||
Payment of formation and operating costs through promissory note - related party | 0 | 460 | ||||||
Loss on sale of Private Placement Warrants | 30,000 | 0 | ||||||
Realized gain on investments held in Trust Account | (21,542 | ) | 0 | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 100,506 | 0 | ||||||
Accounts payable | (12,402 | ) | 0 | |||||
Accrued expenses | 136,436 | 0 | ||||||
Accrued expenses - related party | 3,000 | 0 | ||||||
Net cash used in operating activities | (198,365 | ) | 0 | |||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | (25,250,000 | ) | 0 | |||||
Net cash used in investing activities | (25,250,000 | ) | 0 | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from Initial Public Offering, net of underwriting discount paid | 24,500,000 | 0 | ||||||
Proceeds from sale of Private Placement Warrants | 750,000 | 0 | ||||||
Net cash provided by financing activities | 25,250,000 | 0 | ||||||
Net Change in Cash | (198,365 | ) | 0 | |||||
Cash - Beginning of period | 875,831 | 0 | ||||||
Cash - End of period | $ | 677,466 | $ | 0 | ||||
Non-cash investing and financing activities: | ||||||||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ | 0 | $ | 25,000 | ||||
Deferred offering costs included in accrued offering costs | $ | 0 | $ | 327,451 | ||||
Deferred offering costs included in due to related party | $ | 0 | $ | 24,700 | ||||
Accretion of Class A ordinary shares subject to redemption to redemption value | $ | 2,806,250 | $ | 0 | ||||
Deferred underwriting fee payable | $ | 875,000 | $ | 0 | ||||
Forfeiture of Class B ordinary shares by Sponsor | $ | 13 | $ | 0 | ||||
(1) | Periods presented have been adjusted to reflect the derecognition of deferred underwriting fees payable. Additional information regarding the derecognition may be found in Note 1—Description of Organization and Business Operations and Liquidity and Going Concern, included elsewhere in the notes to the financial statements. |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
Formation and operating costs | $ | 1,218,706 | $ | 425,905 | ||||
Loss from operations | (1,218,706 | ) | (425,905 | ) | ||||
Loss on sale of Private Placement Warrants | — | (30,000 | ) | |||||
Unrealized gain on investments held in Trust Account | 2,328,946 | 21,542 | ||||||
Net income (loss) | $ | 1,110,240 | $ | (434,363 | ) | |||
Basic and diluted weighted average shares outstanding, Class A ordinary shares | 22,500,000 | 22,000,000 | ||||||
Basic and diluted net income (loss) per share, Class A ordinary shares | $ | 0.04 | $ | (0.02 | ) | |||
Basic and diluted weighted average shares outstanding, Class B ordinary shares | 5,625,000 | 5,500,000 | ||||||
Basic and diluted net income (loss) per share, Class B ordinary shares | $ | 0.04 | $ | (0.02 | ) | |||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2022 (1) as restated | — | $ | — | 5,625,000 | $ | 562 | $ | — | $ | 162,688 | $ | 163,250 | ||||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | — | — | — | — | (2,328,946 | ) | (2,328,946 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 1,110,240 | 1,110,240 | |||||||||||||||||||||
Balance at March 31, 2023 (1) as restated | — | $ | — | 5,625,000 | $ | 562 | $ | — | $ | (1,056,018 | ) | $ | (1,055,456 | ) | ||||||||||||||
Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholder’s Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2021 | — | $ | — | 5,750,000 | $ | 575 | $ | — | $ | (5,484,631 | ) | $ | (5,484,056 | ) | ||||||||||||||
Proceeds from Initial Public Offering allocated to Public Warrants, net of offering costs | — | — | — | — | 1,181,250 | — | 1,181,250 | |||||||||||||||||||||
Issuance of Private Placement Warrants | — | — | — | — | 780,000 | — | 780,000 | |||||||||||||||||||||
Forfeiture of Class B Shares by Sponsor | — | — | (125,000 | ) | (13 | ) | — | 13 | — | |||||||||||||||||||
Accretion of Class A ordinary shares to redemption amount | — | — | — | — | (1,961,250 | ) | (845,000 | ) | (2,806,250 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (434,363 | ) | (434,363 | ) | |||||||||||||||||||
Balance at March 31, 2022 | — | $ | — | 5,625,000 | $ | 562 | $ | — | $ | (6,763,981 | ) | $ | (6,763,419 | ) | ||||||||||||||
(1) | Periods presented have been adjusted to reflect the derecognition of deferred underwriting fees payable. Additional information regarding the derecognition may be found in Note 1—Description of Organization and Business Operations and Liquidity and Going Concern, included elsewhere in the notes to the financial statements. |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 1,110,240 | $ | (434,363 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Loss on sale of Private Placement Warrants | — | 30,000 | ||||||
Unrealized gain on investments held in Trust Account | (2,328,946 | ) | — | |||||
Realized gain on investments held in Trust Account | — | (21,542 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 82,367 | 100,506 | ||||||
Accounts payable | (29,706 | ) | (12,402 | ) | ||||
Accrued expenses | 883,881 | 136,436 | ||||||
Accrued expenses—related party | — | 3,000 | ||||||
Net cash used in operating activities | (282,164 | ) | (198,365 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | — | (25,250,000 | ) | |||||
Net cash used in investing activities | — | (25,250,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from Initial Public Offering, net of underwriting discount paid | — | 24,500,000 | ||||||
Proceeds from sale of Private Placement Warrants | — | 750,000 | ||||||
Net cash provided by financing activities | — | 25,250,000 | ||||||
Net Change in Cash | (282,164 | ) | (198,365 | ) | ||||
Cash— Beginning of period | 461,914 | 875,831 | ||||||
Cash—End of period | $ | 179,750 | $ | 677,466 | ||||
Non-cash investing and financingactivities : | ||||||||
Accretion of Class A ordinary shares subject to redemption value | $ | 2,328,946 | $ | — | ||||
Initial accretion of Class A ordinary shares from issuance of over-allotment warrants | $ | — | $ | 2,806,250 | ||||
Deferred underwriting fee payable | $ | — | $ | 875,000 | ||||
Forfeiture of Class B ordinary shares by Sponsor | $ | — | $ | 13 | ||||
March 31, 2023 | ||||||||||||
As Previously Reported | Adjustments | As Restated | ||||||||||
Condensed Balance Sheet as of March 31, 2023 (unaudited) | ||||||||||||
Deferred underwriting fee payable | $ | 7,875,000 | $ | (7,875,000 | ) | $ | — | |||||
Total liabilities | $ | 9,642,039 | $ | (7,875,000 | ) | $ | 1,767,039 | |||||
Accumulated deficit | $ | (8,931,018 | ) | $ | 7,875,000 | $ | (1,056,018 | ) | ||||
Total Shareholders’ Deficit | $ | (8,930,456 | ) | $ | 7,875,000 | $ | (1,055,456 | ) | ||||
Condensed Statement of Changes in Shareholders’ Deficit for the Three Months Ended March 31, 2023 (unaudited) | ||||||||||||
Balance at December 31, 2022 | $ | (7,711,750 | ) | $ | 7,875,000 | $ | 163,250 | |||||
Balance at March 31, 2023 | $ | (8,930,456 | ) | $ | 7,875,000 | $ | (1,055,456 | ) |
March 31, 2022 | December 31, 2021 | |||||||
Gross proceeds | $ | 225,000,000 | $ | 200,000,000 | ||||
Less: | ||||||||
Proceeds allocated to Public Warrants | (12,650,000 | ) | (11,400,000 | ) | ||||
Issuance costs allocated to Class A ordinary shares | (24,864,388 | ) | (23,558,138 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 39,764,388 | 36,958,138 | ||||||
Class A ordinary shares subject to possible redemption | $ | 227,250,000 | $ | 202,000,000 | ||||
Class A ordinary shares subject to possible redemption at December 31, 2022 | $ | 229,692,494 | ||
Accretion of carrying value to redemption value | 2,328,946 | |||
Class A ordinary shares subject to possible redemption at March 31, 2023 | $ | 232,021,440 | ||
Three Months Ended March 31, 2022 | For the Period From February 3, 2021 (Inception) Through March 31, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (347,490 | ) | $ | (86,873 | ) | $ | 0 | $ | (6,728 | ) | |||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding | 22,000,000 | 5,500,000 | 0 | 5,000,000 | ||||||||||||
Basic and diluted net loss per ordinary share | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0 | $ | (0.00 | ) |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income (loss) | $ | 888,192 | $ | 222,048 | $ | (347,490 | ) | $ | (86,873 | ) | ||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average shares outstanding | 22,500,000 | 5,625,000 | 22,000,000 | 5,500,000 | ||||||||||||
Basic and diluted net income per ordinary share | $ | 0.04 | $ | 0.04 | $ | (0.02 | ) | $ | (0.02 | ) | ||||||
Description | Amount at Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
March 31, 2022 | ||||||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account: | ||||||||||||||||
U.S. Treasury Securities Money Market Funds | $ | 227,272,023 | $ | 227,272,023 | $ | 0 | $ | 0 | ||||||||
December 31, 202 1 | ||||||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account: | ||||||||||||||||
U.S. Treasury Securities Money Market Funds | $ | 202,000,481 | $ | 202,000,481 | $ | 0 | $ | 0 |
Description | Amount at Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
March 31, 2023 | ||||||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account: | ||||||||||||||||
U.S. Treasury Securities Money Market Funds | $ | 232,121,440 | $ | 232,121,440 | $ | — | $ | — | ||||||||
December 31, 2022 | ||||||||||||||||
Assets | ||||||||||||||||
Investments held in Trust Account: | ||||||||||||||||
U.S. Treasury Securities Money Market Funds | $ | 229,792,494 | $ | 229,792,494 | $ | — | $ | — |
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed financial statements and related notes included in Part I, Item 1 of this Quarterly Report. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K, as supplemented by Part II, Item 1A “Risk Factors” of this Quarterly Report.
References to the “company,“Company,” “our,” “us” or “we” refer to Swiftmerge Acquisition Corp. The following discussion and analysis of the company’sCompany’s financial condition and results of operations should be read in conjunction with the 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.
Special Note Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q10-Q/A includes forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q.Report. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Overview
We are a blank check company incorporated on February 3, 2021 as a Cayman Islands exempted company and formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar Business Combination with one or more businesses (our “Business Combination”). 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 bankbanks or other lenders or the owners of the target, or a combination of the foregoing.
Our registration statement for our Initial Public Offering was declared effective on December 14, 2021. On December 17, 2021, we consummated our Initial Public Offering of 20,000,000 units (the “units” and, with respect to the Class A ordinary shares included in the units being offered, the “Public Shares”) at $10.00 per unit, generating gross proceeds of approximately $200$200.0 million, and incurring offering costs of approximately $12.6 million, of which approximately $7$7.0 million was for deferred underwriting commissions. On January 18, 2022, the underwriter partially exercised its Over-Allotment Option, resulting in 2,500,000 additional units being sold at $10.00 per unit, generating gross proceeds of approximately $25$25.0 million.
20
Rule
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities for the period from February 3, 2021 (inception) through December 31, 2021 and for the three months ended March 31, 20222023 were organizational activities, those necessary to prepare for the Initial Public Offering, as described below, and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. We will not be generating any operating revenues until the closing and completion of our initial Business Combination, at the earliest. We generate
For the three months ended March 31, 2023, we had a net income of $1,110,240, which resulted from a gain on investments held in the Trust Account of $2,328,946, offset by formation and operating costs of $1,218,706.
For the three months ended March 31, 2022, we had a net loss of $434,363, which resulted from formation and operating costs of $425,905 and a loss on the sale of private placement warrantsPrivate Placement Warrants to our sponsorSponsor of $30,000, offset in part by a gain on investments held in the Trust Account of $21,542.
Liquidity, Capital Resources and operating costs.
As of March 31, 2022,2023, the Company had cash held outside of the Trust Account of $677,466$179,750 and a working capital surplusdeficit of $1,089,558.
Our liquidity needs up to March 31, 2022 had been satisfied through a payment of $25,000 from the Sponsor to cover certain expenses on behalf of the companyCompany in exchange for the issuance of the Founder Shares, a loan under the Promissory Note from our Sponsor of approximately $149,172, and the net proceeds from the consummation of the private placement not held in the Trust Account. The Promissory Note was repaid in full on December 21, 2021. In addition, in order to finance transaction costs in connection with an initial Business Combination, our officers, directors and initial shareholders may, but are not obligated to, provide the companyCompany with working capital loans. To date, there are no amounts outstanding under any working capital loans.
For the three months ended March 31, 2023, net cash used in operating activities was $282,164, which was due to our net income of $1,110,240 and changes in working capital of $936,542, offset by a gain on investments held in the Trust Account of $2,328,946.
For the three months ended March 31, 2022, net cash used in operating activities was $198,365, which was due to our net loss of $434,363 and a gain on investments held in the Trust Account of $21,542, offset in part by changes in working capital of $227,540 and a loss on the sale of private placement warrantsPrivate Placement Warrants to our sponsorSponsor of $30,000.
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For the period from February 3, 2021 (inception) throughthree months ended March 31, 2021,2023, net cash used in operatinginvesting activities was $0 which was due to net loss of $6,728, offset byno investing activities in the payment of formation and operating costs through due to related party of $6,268 and payment of formation and operating costs through the Promissory Note - related party of $460.
For the three months ended March 31, 2022, net cash used in investing activities of $25,250,000 was the result of the amount of net proceeds from the exercise of the Over-Allotment Option and proceeds from the sale of the Private Placement Warrants being deposited to the Trust Account.
For the three months ended March 31, 2023, net cash provided by financing activities of $0 due to no financing activities in the period.
For the three months ended March 31, 2022, net cash provided by financing activities of $25,250,000 was comprised of $24,500,000 in proceeds from the Initial Public Offering net of underwriting discount paid and $750,000 in proceeds from the sale of Private Placement Warrants.
As of March 31, 20222023, we had cash of $677,466$179,750 held outside the Trust Account. We intend to use the funds held outside the Trust Account primarily to 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 order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the company’sCompany’s officers and directors may, but are not obligated to, loan the companyCompany funds as may be required. If the companyCompany completes an initial Business Combination, the companyCompany may repay such loaned amounts out of the proceeds of the Trust Account released to the company.Company. Otherwise, such loans may be repaid only out of funds held outside the Trust Account. In the event that we do not consummate an initial Business Combination, the companyCompany may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. To date, there were no amounts outstanding under any of these loans.
Prior to the completion of the Initial Public Offering, substantial doubt about the Company’s ability to continue as a going concern existed as the Company lacked the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. The Company has since completed its Initial Public Offering at which time capital in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the Company for general working capital purposes.
Based on the cash forecast we prepared as of March 31, 2023, the amounts held in the operating account will not provide the Company with sufficient funds to meet its operational and liquidity obligations up to the expiration date of March 15, 2024.
Unless further extended, the Company will have until March 15, 2024 to complete a Business Combination. If a Business Combination is not consummated by March 15, 2024 and an extension has not been effected, there will be a mandatory liquidation and subsequent dissolution of the Company.
Based on the above, we have determined that there is substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. Although the Company intends to consummate a business combination on or before March 15, 2024, it is uncertain whether the Company will be able to do so by this time. While we expect to have sufficient access to additional sources of capital if necessary, there is no current confirmed financing commitment, and no assurance can be provided that such additional financing will become available to the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Off-Balance
We did not have any
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of up to $1,000 for office space and administrative support to the company.Company. We began incurring service fees on December 17, 2021 and will continue to incur such fees monthly until the earlier of the completion of the Business Combination and the company’sCompany’s liquidation.
Registration and Shareholder Rights Agreement
The holders of the Founder Shares, Private Placement Warrants and 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 issued upon conversion of the working capital loans) have registration and shareholder rights to require the companyCompany to register a sale of any of its securities held by them pursuant to a registration and shareholder rights agreement entered into on the date of the Initial Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the companyCompany register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of an initial Business Combination. The companyCompany will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a
The underwriter is entitledwas paid a cash underwriting discount of $0.20 per Unit, or $4,500,000 in the aggregate, upon the closing of the Initial Public Offering and including the Units sold pursuant to a deferred fee ofthe over-allotment. In addition, $0.35 per unit,Unit, or $7,875,000 in the aggregate. The deferred fee will becomeaggregate would have been payable to the underwriter for deferred underwriting commissions.
In November 2022, the Company obtained a waiver letter from the amounts held inunderwriter that waived all rights to the Trust Account solely indeferred underwriting commissions payable to the event thatunderwriter at the company completes anclosing of the Company’s initial Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
The preparation of 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 Classification
The companyCompany accounts for the warrants issued in connection with the Initial Public Offering and the private placement in accordance with the guidance contained in ASC
Ordinary Shares Subject to Possible Redemption
All of the 22,500,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering (and including the Units sold in connection with the underwriters’ partial exercise of the Over-Allotment Option) contain a redemption feature which allows for the redemption of such public shares in connection with the company’sCompany’s liquidation, if there is a shareholder vote or tender offer in connection with the initial Business Combination and in connection with certain amendments to the Amended and Restated Memorandum and Articles of Association. In accordance with ASC
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The companyCompany recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable 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
Net LossIncome (Loss) Per Ordinary Share
Net lossincome (loss) per ordinary share is computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the period. The companyCompany has not considered the effect of the warrants sold in the Initial Public Offering as part of the Units and the Private Placement Warrants in the calculation of diluted loss per share, because the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
Recent Accounting Standards
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the company’sCompany’s financial statements.
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 Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “certifying officers”), the effectiveness of our disclosure controls and procedures as of March 31, 2022,2023, pursuant to Rule
In November 2022, the Company obtained a waiver letter from the underwriter in the Company’s initial public offering that waived all rights to the deferred underwriting commissions payable to the underwriter at the closing of the Company’s initial Business Combination. On August 21, 2023, in connection with the preparation of the Company’s unaudited financial statements for the quarter and six-months ended June 30, 2023, management determined that the waived deferred underwriting commission had previously been improperly classified as a liability after the waiver was obtained. As a result, management determined that it is appropriate to restate the Company’s previously issued audited financial statements as of and for the year ended December 31, 2022, included in the Company’s previously filed Annual Report on Form 10-K with the Securities and Exchange Commission (the “Form 10-K”), and the unaudited financial statements as of and for the three months ended March 31, 2023, included in the Company’s previously filed Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the “Form 10-Q” and collectively with the Form 10-K and the financial statements included in the Form 10-K and the Form 10-Q, the “Non-Reliance Financial Statements”). The Company’s audit committee concluded that the Non-Reliance Financial Statements should no longer be relied upon, and that the Company will amend the Form 10-K and the Form 10-Q to include restatements of the Non-Reliance Financial Statements. The changes do not impact the Company’s cash position.
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As a result of the foregoing, the Company’s management reassessed the effectiveness of its disclosure controls and procedures for the periods affected by the restatement. After that reassessment, the Company’s management determined that its disclosure controls and procedures for such periods were not effective as a result of the foregoing.
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.
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 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II –II. OTHER INFORMATION
ITEM 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form
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Exhibit No. | Description | |
32.1** | Certification of | |
32.2** | Certification of | |
101.INS* | Inline XBRL Instance | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition | |
101.LAB* | Inline XBRL Taxonomy Extension | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation | |
Cover Page Interactive Data File |
* | Filed herewith. |
** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this reportamendment to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: | By: | /s/ John Bremner | ||||
John Bremner | ||||||
Chief Executive Officer |
Date: | By: | /s/ Christopher J. Munyan | ||||||||
Christopher J. Munyan | ||||||||||
Chief Financial Officer |
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