☒ | 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 | 001-40013 | 98-1574120 | |||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | |||
57 Ocean, Suite 403, 5775 Collins Avenue Miami Beach, Florida | 33140 | ||||
(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, $0.0001 par value, and one-fifth of one redeemable warrant | RMGCU | The Nasdaq Capital Market LLC | |||
Class A Ordinary Shares included as part of the units | RMGC | The Nasdaq Capital Market LLC | |||
Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50 | RMGCW | The Nasdaq Capital Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
RMG ACQUISITION CORP. III
March 31, 2023
Page No. | ||||||
PART I. FINANCIAL INFORMATION | ||||||
Item 1. | 1 | |||||
No. | ||||||
| ||||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | 18 | |||||
Item 3. | 22 | |||||
Item 4. | 22 | |||||
Item 1. | 23 | |||||
Item 1A. | 23 | |||||
Item 2. | 23 | |||||
Item 3. | 24 | |||||
Item 4. | 24 | |||||
Item 5. | 24 | |||||
Item 6. | 24 | |||||
25 |
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
Unaudited | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 15,055 | $ | 22,339 | ||||
Prepaid expenses | 118,317 | 50,892 | ||||||
Total current assets | 133,372 | 73,231 | ||||||
Cash and investments held in Trust Account | 10,683,049 | 487,268,822 | ||||||
Total Assets | $ | 10,816,421 | $ | 487,342,053 | ||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 350,547 | $ | 153,571 | ||||
Accrued expenses | 2,595,834 | 899,845 | ||||||
Accrued expenses - related party | 180,000 | 120,000 | ||||||
Total current liabilities | 3,126,381 | 1,173,416 | ||||||
Deferred legal fees | 250,000 | 250,000 | ||||||
Deferred underwriting commissions | 16,905,000 | 16,905,000 | ||||||
Convertible working capital loan - related party | 750,000 | 500,000 | ||||||
Derivative warrant liabilities | 2,592,068 | 536,300 | ||||||
Total liabilities | 23,623,449 | 19,364,716 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares; 918,402 and 48,300,000 shares subject to possible redemption at $11.52 and $10.09 per share at March 31, 2023 and December 31, 2022, respectively | 10,583,049 | 487,168,822 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at March 31, 2023 and December 31, 2022, respectively | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 12,075,000 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 1,208 | 1,208 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (23,391,285 | ) | (19,192,693 | ) | ||||
Total shareholders’ deficit | (23,390,077 | ) | (19,191,485 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 10,816,421 | $ | 487,342,053 |
September 30, 2022 | December 31, 2021 | |||||||
(unaudited) | ||||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 85,886 | $ | 93,599 | ||||
Prepaid expenses | 214,892 | 568,058 | ||||||
Total current assets | 300,778 | 661,657 | ||||||
Investments held in Trust Account | 485,865,952 | 483,012,312 | ||||||
Other assets | — | 47,083 | ||||||
Total Assets | $ | 486,166,730 | $ | 483,721,052 | ||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 136,150 | $ | 73,405 | ||||
Accrued expenses | 441,440 | 90,287 | ||||||
Accrued expenses - related party | 60,000 | — | ||||||
Total current liabilities | 637,590 | 163,692 | ||||||
Deferred legal fees | 250,000 | 250,000 | ||||||
Deferred underwriting commissions | 16,905,000 | 16,905,000 | ||||||
Convertible working capital loan - related party | 498,729 | — | ||||||
Derivative warrant liabilities | 2,127,240 | 14,301,100 | ||||||
Total liabilities | 20,418,559 | 31,619,792 | ||||||
Commitments and Contingencies | ||||||||
Class A ordinary shares; 48,300,000 and no shares subject to possible redemption at $10.06 and $10.00 per share at September 30, 2022 and December 31, 2021, respectively | 485,765,952 | 483,000,000 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at September 30, 2022 and December 31, 2021, respectively | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 12,075,000 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 1,208 | 1,208 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (20,018,989 | ) | (30,899,948 | ) | ||||
Total shareholders’ deficit | (20,017,781 | ) | (30,898,740 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 486,166,730 | $ | 483,721,052 | ||||
For the Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
General and administrative expenses | $ | 2,142,881 | $ | 689,613 | ||||
Loss from operations | (2,142,881 | ) | (689,613 | ) | ||||
Other (expense) income: | ||||||||
Change in fair value of derivative liabilities | (2,055,768 | ) | 6,418,128 | |||||
Interest income – bank | 57 | — | ||||||
Interest expense | — | (1,761 | ) | |||||
Investment income earned on cash and investments held in Trust Account | 1,417,859 | 48,436 | ||||||
Total other (expense) income, net | (637,852 | ) | 6,464,803 | |||||
Net (loss) income | $ | (2,780,733 | ) | $ | 5,775,190 | |||
Weighted average Class A ordinary shares, basic and diluted | 6,709,486 | 48,300,000 | ||||||
Basic and diluted net (loss) income per ordinary share, Class A | $ | (0.15 | ) | $ | 0.10 | |||
Weighted average Class B ordinary shares, basic and diluted | 12,075,000 | 12,075,000 | ||||||
Basic and diluted net (loss) income per ordinary share, Class B | $ | (0.15 | ) | $ | 0.10 |
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | 293,696 | $ | 283,830 | $ | 1,408,870 | $ | 1,513,445 | ||||||||
Loss from operations | (293,696 | ) | (283,830 | ) | (1,408,870 | ) | (1,513,445 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Change in fair value of derivative liabilities | (697,008 | ) | 6,077,950 | 12,181,745 | 7,537,410 | |||||||||||
Financing costs - warrant liabilities | — | — | — | (734,320 | ) | |||||||||||
Interest income | — | 13 | — | 47 | ||||||||||||
Interest expense | (2,468 | ) | — | (6,614 | ) | — | ||||||||||
Unrealized gain on investments held in Trust Account | 2,179,997 | 6,216 | 2,880,650 | 40,207 | ||||||||||||
Total other income (expense) | 1,480,521 | 6,084,179 | 15,055,781 | 6,843,344 | ||||||||||||
Net income | $ | 1,186,825 | $ | 5,800,349 | $ | 13,646,911 | $ | 5,329,899 | ||||||||
Weighted average Class A ordinary shares, basic and diluted | 48,300,000 | 48,300,000 | 48,300,000 | 41,098,909 | ||||||||||||
Basic and diluted net income per ordinary share, Class A | $ | 0.02 | $ | 0.10 | $ | 0.23 | $ | 0.10 | ||||||||
Weighted average Class B ordinary shares, basic and diluted | 12,075,000 | 12,075,000 | 12,075,000 | 11,850,000 | ||||||||||||
Basic and diluted net income per ordinary share, Class B | $ | 0.02 | $ | 0.10 | $ | 0.23 | $ | 0.10 | ||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2021 | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (30,899,948 | ) | $ | (30,898,740 | ) | ||||||||||||||
Net income | — | — | — | — | — | 5,775,190 | 5,775,190 | |||||||||||||||||||||
Balance - March 31, 2022 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (25,124,758 | ) | $ | (25,123,550 | ) | ||||||||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (585,955 | ) | (585,955 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 6,684,896 | 6,684,896 | |||||||||||||||||||||
Balance - June 30, 2022 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (19,025,817 | ) | $ | (19,024,609 | ) | ||||||||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (2,179,997 | ) | (2,179,997 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 1,186,825 | 1,186,825 | |||||||||||||||||||||
Balance - September 30, 2022 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (20,018,989 | ) | $ | (20,017,781 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2022 | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (19,192,693 | ) | $ | (19,191,485 | ) | ||||||||||||||
Remeasurement adjustment of Class A ordinary shares subject to possible redemption | — | — | — | — | — | (1,417,859 | ) | (1,417,859 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (2,780,733 | ) | (2,780,733 | ) | |||||||||||||||||||
Balance – March 31, 2023 | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (23,391,285 | ) | $ | (23,390,077 | ) |
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2021 | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (30,899,948 | ) | $ | (30,898,740 | ) | ||||||||||||||
Net income | — | — | — | — | — | 5,775,190 | 5,775,190 | |||||||||||||||||||||
Balance - March 31, 2022 | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (25,124,758 | ) | $ | (25,123,550 | ) |
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 12,075,000 | $ | 1,208 | $ | 23,792 | $ | (14,779 | ) | $ | 10,221 | |||||||||||||||
Excess purchase price above fair value of private placement warrants | — | — | — | — | 1,383,265 | — | 1,383,265 | |||||||||||||||||||||
Accrection on Class A ordinary shares subject to possible redemption | — | — | — | — | (1,407,057 | ) | (37,862,788 | ) | (39,269,845 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (2,198,937 | ) | (2,198,937 | ) | |||||||||||||||||||
Balance - March 31, 2021 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (40,076,504 | ) | $ | (40,075,296 | ) | ||||||||||||||
Net income | — | — | — | — | — | 1,728,487 | 1,728,487 | |||||||||||||||||||||
Balance - June 30, 2021 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (38,348,017 | ) | $ | (38,346,809 | ) | ||||||||||||||
Net income | — | — | — | — | — | 5,800,349 | 5,800,349 | |||||||||||||||||||||
Balance - September 30, 2021 (unaudited) | — | $ | — | 12,075,000 | $ | 1,208 | $ | — | $ | (32,547,668 | ) | $ | (32,546,460 | ) | ||||||||||||||
For the Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net (loss) income | $ | (2,780,733 | ) | $ | 5,775,190 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Change in fair value of derivative liabilities | 2,055,768 | (6,418,128 | ) | |||||
Interest expense | — | 1,761 | ||||||
Investment income earned on cash and investments held in Trust Account | (1,417,859 | ) | (48,436 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | (67,425 | ) | 72,999 | |||||
Accounts payable | 196,976 | 52,103 | ||||||
Accrued expenses - related party | 60,000 | — | ||||||
Accrued expenses | 1,695,989 | 329,840 | ||||||
Net cash used in operating activities | (257,284 | ) | (234,671 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash withdrawn from Trust Account in connection with redemption | 478,003,632 | — | ||||||
Net cash provided by investing activities | 478,003,632 | — | ||||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from convertible promissory note - related party | 250,000 | — | ||||||
Proceeds from promissory note | — | 375,000 | ||||||
Redemption of common stock | (478,003,632 | ) | — | |||||
Net cash (used in) provided by financing activities | (477,753,632 | ) | 375,000 | |||||
Net (decrease) increase in cash | (7,284 | ) | 140,329 | |||||
Cash - beginning of the period | 22,339 | 93,599 | ||||||
Cash - end of the period | $ | 15,055 | $ | 233,928 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Change Increase in value of Class A common stock subject to possible redemption | $ | 1,417,859 | $ | — |
For the nine months ended September 30, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 13,646,911 | $ | 5,329,899 | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Change in fair value of derivative liabilities | (12,181,745 | ) | (7,537,410 | ) | ||||
Financing costs - warrant liabilities | — | 734,320 | ||||||
Interest expense | 6,614 | — | ||||||
Unrealized gain on investments held in Trust Account | (2,880,650 | ) | (40,207 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other assets | 400,249 | (746,446 | ) | |||||
Accounts payable | 62,745 | 21,558 | ||||||
Accrued expenses | 351,153 | 20,287 | ||||||
Accrued expenses - related party | 60,000 | — | ||||||
Net cash used in operating activities | (534,723 | ) | (2,217,999 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | — | (483,000,000 | ) | |||||
Cash withdrawn from Trust Account | 27,010 | — | ||||||
Net cash provided by (used in) investing activities | 27,010 | (483,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from note payable to related party | — | 30,212 | ||||||
Repayment of note payable to related party | — | (135,000 | ) | |||||
Proceeds from convertible working capital loan | 500,000 | — | ||||||
Proceeds received from initial public offering, gross | — | 483,000,000 | ||||||
Proceeds received from private placement | — | 12,324,495 | ||||||
Offering costs paid | — | (9,810,697 | ) | |||||
Net cash provided by financing activities | 500,000 | 485,409,010 | ||||||
Net (decrease) increase in cash | (7,713 | ) | 191,011 | |||||
Cash - beginning of the period | 93,599 | — | ||||||
Cash - end of the period | $ | 85,886 | $ | 191,011 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption | $ | 2,765,952 | $ | — | ||||
Offering costs included in accrued expenses | $ | — | $ | 70,000 | ||||
Offering costs paid by related party under promissory note | $ | — | $ | 104,788 | ||||
Deferred legal fees | $ | — | $ | 250,000 | ||||
Deferred underwriting commissions | $ | — | $ | 16,905,000 | ||||
Reversal of accrued expenses | $ | — | $ | 25,000 |
For the Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net (loss) income per common share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net (loss) income | $ | (993,229 | ) | $ | (1,787,504 | ) | $ | 4,620,152 | $ | 1,155,038 | ||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 6,709,486 | 12,075,000 | 48,300,000 | 12,075,000 | ||||||||||||
Basic and diluted net (loss) income per common share | $ | (0.15 | ) | $ | (0.15 | ) | $ | 0.10 | $ | 0.10 |
For the Three Months Ended September 30, 2022 | For the Nine Months Ended September 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per common share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 949,460 | $ | 237,365 | $ | 10,917,529 | $ | 2,729,382 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 48,300,000 | 12,075,000 | 48,300,000 | 12,075,000 | ||||||||||||
Basic and diluted net income per common share | $ | 0.02 | $ | 0.02 | $ | 0.23 | $ | 0.23 | ||||||||
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per common share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss) | $ | 4,640,279 | $ | 1,160,070 | $ | 4,137,064 | $ | 1,192,835 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 48,300,000 | 12,075,000 | 41,098,909 | 11,850,000 | ||||||||||||
Basic and diluted net income per common share | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.10 | ||||||||
September 30, 2022 | ||||
Principal value of convertible working capital loan | $ | 500,000 | ||
Debt discount | (1,271 | ) | ||
Carrying value of convertible working capital loan-related party | $ | 498,729 | ||
Class A ordinary shares subject to possible redemption at December 31, 2021 | $ | 483,000,000 | ||
Increase in redemption value of Class A ordinary shares subject to possible redeem | 4,168,822 | |||
Class A ordinary shares subject to possible redemption at December 31, 2022 | 487,168,822 | |||
Decrease in redemption value of shares | (478,003,632 | ) | ||
Increase in redemption value of Class A ordinary shares subject to possible redeem | 1,417,859 | |||
Class A ordinary shares subject to possible redemption at March 31, 2023 | $ | 10,583,049 |
Gross Proceeds | $ | 483,000,000 | ||
Less: | — | |||
Offering costs allocated to Class A shares subject to possible redemption | (26,406,165 | ) | ||
Proceeds allocated to Public Warrants at issuance | (12,863,680 | ) | ||
Plus: | ||||
Accrection on Class A ordinary shares subject to possible redemption amount | 39,269,845 | |||
Class A ordinary shares subject to possible redemption at December 31, 2021 | 483,000,000 | |||
Increase in redemption value of Class A ordinary shares subject to possible redemption | 2,765,952 | |||
Class A ordinary shares subject to possible redemption at September 30, 2022 | $ | 485,765,952 | ||
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A ordinary shares; |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Cash held in Trust Account | $ | 10,683,049 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative liabilities - Public Warrants | $ | 1,400,700 | $ | — | $ | — | ||||||
Derivative liabilities - Private Warrants | $ | — | $ | — | $ | 1,191,368 |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account-U.S. Treasury Securities | $ | 485,865,952 | $ | — | $ | — | ||||||
Liabilities | ||||||||||||
Derivative liabilities-Public Warrants | $ | 1,149,540 | $ | — | $ | — | ||||||
Derivative liabilities-Private Warrants | — | — | 977,700 |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account - Money Market Funds | $ | 487,268,822 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative liabilities - Public Warrants | $ | 289,800 | $ | — | $ | — | ||||||
Derivative liabilities - Private Warrants | $ | — | $ | — | $ | 246,500 |
Description | Level 1 | Level 2 | Level 3 | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account-U.S. Treasury Securities | $ | 483,012,312 | $ | — | $ | — | ||||||
Liabilities | ||||||||||||
Derivative liabilities-Public Warrants | $ | 7,728,000 | $ | — | $ | — | ||||||
Derivative liabilities-Private Warrants | — | — | 6,573,100 |
Private Warrants | As of December 31, 2022 | As of March 31, 2023 | ||||||
Stock price | $ | 10.09 | $ | 10.21 | ||||
Volatility | 6.9 | % | 10.2 | % | ||||
Expected life of the options to convert | 5.47 | 0.97 | ||||||
Risk-free rate | 4.73 | % | 4.66 | % | ||||
Dividend yield | — | — |
September 30, 2022 | December 31, 2021 | |||||||
Share price | $ | 9.94 | $ | 9.77 | ||||
Volatility | 16.9 | % | 15.3 | % | ||||
Expected life of the options to convert | 5.33 | 5.60 | ||||||
Risk-free rate | 4.05 | % | 1.32 | % | ||||
Dividend yield | — | — |
December 31, 2022 | March 31, 2023 | |||||||
Strike price of debt conversion | $ | 1.50 | $ | 1.50 | ||||
Volatility | 6.9 | % | 10.2 | % | ||||
Expected life of the options to convert | 5.47 | 5.46 | ||||||
Risk-free rate | 4.72 | % | 4.93 | % | ||||
Dividend yield | — | — |
January 20, 2022 | September 30, 2022 | |||||||
Strike price of debt conversion | $ | 1.50 | $ | 1.50 | ||||
Volatility | 12.1 | % | 16.9 | % | ||||
Expected life of the options to convert | 5.82 | 5.33 | ||||||
Risk-free rate | 1.68 | % | 3.53 | % | ||||
Dividend yield | — | — |
Private Warrants | ||||
Derivative warrant liabilities at December 31, 2021 | $ | 6,573,100 | ||
Change in fair value of derivative warrant liabilities | (2,946,400 | ) | ||
Derivative warrant liabilities at March 31, 2022 | 3,626,700 | |||
Change in fair value of derivative warrant liabilities | (3,380,200 | ) | ||
Derivative warrant liabilities at December 31, 2022 | 246,500 | |||
Change in fair value of derivative warrant liabilities | 944,868 | |||
Derivative warrant liabilities at March 31, 2023 | $ | 1,191,368 |
Public Warrants | Private Warrants | Total | ||||||||||
Derivative warrant liabilities at December 31, 2020 | $ | — | $ | — | $ | — | ||||||
Issuance of Public and Private Warrants | 12,863,680 | 10,941,230 | 23,804,910 | |||||||||
Transfer of Public Warrants to Level 1 | (13,524,000 | ) | — | (13,524,000 | ) | |||||||
Change in fair value of derivative warrant liabilities | 660,320 | (4,368,130 | ) | (3,707,810 | ) | |||||||
Derivative warrant liabilities at December 31, 2021 | — | 6,573,100 | 6,573,100 | |||||||||
Change in fair value of derivative warrant liabilities | — | (2,946,400 | ) | (2,946,400 | ) | |||||||
�� | ||||||||||||
Derivative warrant liabilities at March 31, 2022 | — | 3,626,700 | 3,626,700 | |||||||||
Change in fair value of derivative warrant liabilities | — | (2,969,400 | ) | (2,969,400 | ) | |||||||
Derivative warrant liabilities at June 30, 2022 | — | 657,300 | 657,300 | |||||||||
Change in fair value of derivative warrant liabilities | — | 320,400 | 320,400 | |||||||||
Derivative warrant liabilities at September 30, 2022 | $ | — | $ | 977,700 | $ | 977,700 | ||||||
Balance at December 31, 2021 | $ | — | ||
Initial fair value of the Working Capital Loan Option | 7,885 | |||
Change in fair value | ( | ) | ||
Balance at December 31, 2022 and March 31, 2023 | $ | |||
— | ||||
• | by H2B2 if (i) prior to completion of a Capital Raise Transaction (as defined in the Merger Agreement), a Capital Raise Investor (as defined in the Merger Agreement) or group of Capital Raise Investors, with legal, valid and binding commitments to fund in such Capital Raise Transaction represent in the aggregate at least the Minimum Investment Amount (as defined in the Merger Agreement) object to the Merger and the other transactions contemplated by the Merger Agreement by delivering a written notice to the board of directors of H2B2 by no later than fifteen days following execution of definitive agreements relating to the Capital Raise Transaction after which time no Capital Raise Investor will be entitled to object to the Merger and the other transactions contemplated by the Merger Agreement; provided that, upon receipt of the written notice described above, H2B2 will be required to terminate the Merger Agreement on the tenth business day following receipt of the written notice; |
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we will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete our initial business combination by the end of the Combination Period, or by the applicable deadline as may be extended.
For the three months ended September 30, 2021, we had net income of approximately $5.8 million, resulting from a non-operating gain of approximately $6.1 million from the change in fair value of the derivative warrant liabilities and an unrealized gain on investments held in Trust of approximately $6,000, partially offset by approximately $284,000 in general and administrative costs.
For the nine months ended September 30, 2022, we had net income of approximately $13.6 million principally from the change in the value of derivative warrant liabilities of approximately $12.2 million. The $2.9 million unrealized gain on investments held in Trust Account was partially offset by approximately $1.4 million in general and administrative costs.
For the nine months ended September 30, 2021, we had a net income of approximately $5.3 million, resulting from a non-operating gain of approximately $7.5 million from the change in fair value of the derivative warrant liabilities and an unrealized gain on investments held in Trust of approximately $40,000, partially offset by $1.5 million in general and administrative costs and financing costs associated with derivative warrant liabilities of approximately $734,000.
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In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Basis of Presentation of Financial Statements-Going Concern,” we have determined that the mandatory liquidation date and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. If we are unable to complete a business combination by FebruaryAugust 9, 2023 (unless such a period is extended as described herein), then we will cease all operations except for the purpose of liquidating. Over this time period, we have used, and 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. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after FebruaryAugust 9, 2023. The condensed financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
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effective date of the Initial Public Offering. The holders of these securities were entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
March 31, 2023.
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Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
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Changes in Internal Control over Financial Reporting
If we are deemed to be an investment company for purposes of the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be severely restricted. As a result, in such circumstances, we may elect to abandon our efforts to complete an initial Business Combination and instead choose to liquidate the Company.
On March 30, 2022, the SEC issued proposed rules (the “SPAC Rule Proposals”) relating, among other items, to the circumstances in which SPACs such as the Company 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 Investment Company Act, provided that a SPAC satisfies certain criteria, including a limited time period to announce and complete a de-SPAC transaction. Specifically, to comply with the safe harbor, the SPAC Rule Proposals would require a company to file a report on Form 8-K announcing that it has entered into an agreement with a target company for a Business Combination no later than 18 months after the effective date of its registration statement for its initial public offering (the “IPO Registration Statement”). The company would then be required to complete its initial Business Combination no later than 24 months after the effective date of the IPO Registration Statement.
Because the SPAC Rule Proposals have not yet been adopted, 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 Business Combination within 24 months after the effective date of the IPO Registration Statement.
If we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted, including:
restrictions on the nature of our investments; and
restrictions on any issuance of securities.
In addition, we may be required to institute burdensome compliance requirements, including:
registration as an investment company with the SEC;
adoption of a specific form of corporate structure; and
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
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We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we may be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, if we are deemed to be an investment company under the Investment Company Act, we may elect to abandon our efforts to complete an initial Business Combination and instead choose to liquidate the Company.
To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may, at any time, instruct the trustee to liquidate the securities held in the Trust Account and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of our initial Business Combination or our liquidation. As a result, following the liquidation of securities in the Trust Account, we would likely receive minimal interest, if any, on the funds held in the Trust Account, which would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.
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 direct U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we may, at any time, and we expect that we will, on or prior to the 24-month anniversary of the effective date of the Registration Statement, instruct Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and thereafter to hold all funds in the Trust Account in cash until the earlier of consummation of our Business Combination or liquidation of the Company. Following such liquidation, we would likely receive minimal interest, if any, on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.
In addition, even prior to the 24-month anniversary of the effective date of the Registration Statement, we may be deemed to be an investment company. The longer that the funds in the Trust Account are held in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, even prior to the 24-month anniversary, there is a greater risk that we may be considered an unregistered investment company, in which case we may be required to liquidate the Company. Accordingly, we may determine, in our discretion, to liquidate the securities held in the Trust Account at any time, even prior to the 24-month anniversary, and instead hold all funds in the Trust Account in cash, which would further reduce the dollar amount our public shareholders would receive upon any redemption or liquidation of the Company.
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Exhibit Number | Description | |
Agreement and Plan of Merger, dated as of May 9, 2023, by and among RMG Acquisition Corp. III and H2B2 Electrolysis Technologies, Inc. (incorporated by reference to Exhibit 2.1 to RMG Acquisition Corp. III’s Current Report on Form 8-K (File No. 001-40013) filed with the SEC on May 12, 2023). | ||
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* | 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, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURES
RMG ACQUISITION CORP. III | |||
By: | /s/ Robert S. Mancini | ||
Name: | Robert S. Mancini | ||
Title: | Chief Executive Officer |
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