☒ | 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 | 001-41135 | N/A | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Identification No.) |
PO Box 23 Lime Tree Bay Avenue, Grand Cayman KY1-1102, Cayman Islands | KY1-1102 | |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A ordinary shares, par value $0.0001 per share | TGAA | The Nasdaq | ||
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 | TGAAW | The Nasdaq | ||
Units, each consisting of one Class A ordinary share and one-third of one redeemable warrant | TGAAU | The Nasdaq |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
Auditor Firm Id: PCAOB ID 688 | Auditor Name: Marcum LLP | Auditor Location: West Palm Beach, Florida |
TARGET GLOBAL ACQUISITION I CORP.
TABLE OF CONTENTS
Page | ||||||
1 | ||||||
Item 1. | Financial Statements | 1 | ||||
Condensed Balance Sheets as of | 1 | |||||
2 | ||||||
3 | ||||||
4 | ||||||
Notes to Condensed Unaudited Financial Statements | 5 | |||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
Item 3. | Quantitative and Qualitative Disclosures Regarding Market Risk | |||||
Item 4. | Controls and Procedures | |||||
Item 1. | Legal Proceedings | |||||
Item 1A. | Risk Factors | |||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||
Item 3. | Defaults Upon Senior Securities | |||||
Item 4. | Mine Safety Disclosures | |||||
Item 5. | Other Information | |||||
Item 6. | Exhibits | |||||
September 30, 2022 (Unaudited) | December 31, 2021 | |||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 308,369 | $ | 1,006,074 | ||||
Prepaid expenses | 180,028 | 200,478 | ||||||
Total current assets | 488,397 | 1,206,552 | ||||||
Prepaid expenses, non-current | — | 163,973 | ||||||
Investment held in Trust Account | 220,381,467 | 219,204,052 | ||||||
Total assets | $ | 220,869,864 | $ | 220,574,577 | ||||
Liabilities, Shares Subject to Redemption and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 638,458 | $ | 502,745 | ||||
Due to related party | 97,419 | 7,419 | ||||||
Promissory Note—Related Party | — | 42,156 | ||||||
Over-allotment liability | — | 30,207 | ||||||
Total current liabilities | 735,877 | 582,527 | ||||||
Deferred underwriting commissions | 7,521,380 | 7,521,380 | ||||||
Total liabilities | 8,257,257 | 8,103,907 | ||||||
Commitments and Contingencies (Note 6) | ||||||||
Class A ordinary shares subject to possible redemption, 21,489,658 shares at redemption value of $10.26 and $10.20 at September 30, 2022 and December 31, 2021, respectively | 220,381,466 | 219,194,512 | ||||||
Shareholders’ Equity | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at September 30, 2022 and December 31, 2021 | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding (excluding 21,489,658 shares subject to possible redemption) at September 30, 2022 and December 31, 2021 | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,372,415 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 537 | 537 | ||||||
Accumulated deficit | (7,769,396 | ) | (6,724,379 | ) | ||||
Total Shareholders’ Deficit | (7,768,859 | ) | (6,723,842 | ) | ||||
Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit | $ | 220,869,864 | $ | 220,574,577 | ||||
March 31, 2023 (Unaudited) | December 31, 2022 | |||||||
Assets: | ||||||||
Current assets: | ||||||||
Cash | $ | 195,564 | $ | 394,251 | ||||
Prepaid expenses | 107,328 | 111,739 | ||||||
Total current assets | 302,892 | 505,990 | ||||||
Investment held in Trust Account | 224,592,707 | 222,234,685 | ||||||
Total assets | $ | 224,895,599 | $ | 222,740,675 | ||||
Liabilities, Shares Subject to Redemption and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 176,950 | $ | 157,805 | ||||
Due to related party | 157,419 | 127,419 | ||||||
Promissory Note—Related Party | 500,000 | 500,000 | ||||||
Total current liabilities | 834,369 | 785,224 | ||||||
Deferred underwriting commissions | 3,760,690 | 7,521,380 | ||||||
Total liabilities | 4,595,059 | 8,306,604 | ||||||
Commitments and Contingencies (Note 6) | ||||||||
Class A ordinary shares subject to possible redemption, 21,489,658 shares at redemption value of $10.45 and $10.34 at March 31, 2023 and December 31, 2022, respectively | 224,592,707 | 222,234,685 | ||||||
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 | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none outstanding (excluding 21,489,658 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; 5,372,415 shares issued and outstanding at March 31, 2023 and December 31, 2022 | 537 | 537 | ||||||
Additional Paid in Capital | 3,760,690 | — | ||||||
Accumulated deficit | (8,053,394 | ) | (7,801,151 | ) | ||||
Total Shareholders’ Deficit | (4,292,167 | ) | (7,800,614 | ) | ||||
Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit | $ | 224,895,599 | $ | 222,740,675 | ||||
For the Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
General and administrative expenses | $ | 252,243 | $ | 528,788 | ||||
Loss from operations | (252,243 | ) | (528,788 | ) | ||||
Other income | ||||||||
Interest income on investment held in Trust Account | 2,358,022 | 57,465 | ||||||
Change in fair value of overallotment liability | — | 30,207 | ||||||
T otal other income | 2,358,021 | 87,672 | ||||||
Net income (loss) | $ | 2,105,779 | $ | (441,116 | ) | |||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 21,489,658 | 21,489,658 | ||||||
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption | $ | 0.08 | $ | (0.02 | ) | |||
Basic and diluted, weighted average shares outstanding, Class B non-redeemable ordinary shares | 5,372,415 | 5,372,415 | ||||||
Basic and diluted net income (loss) per share, Class B non-redeemable ordinary shares | $ | 0.08 | $ | (0.02 | ) | |||
For the three months ended September 30, | For the nine months ended September 30, | For the period from February 2, 2021 (inception) through September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | 281,241 | $ | — | $ | 1,065,685 | $ | 10,072 | ||||||||
Loss from operations | (281,241 | ) | — | (1,065,685 | ) | (10,072 | ) | |||||||||
Other income | ||||||||||||||||
Interest income on investment held in Trust Account | 959,949 | — | 1,177,415 | — | ||||||||||||
Change in fair value of overallotment liability | — | — | 30,207 | — | ||||||||||||
T otal other income | 959,949 | — | 1,207,622 | — | ||||||||||||
Net income (loss) | $ | 678,708 | $ | — | $ | 141,937 | $ | (10,072 | ) | |||||||
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption | 21,489,658 | — | 21,489,658 | — | ||||||||||||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | 0.03 | $ | — | $ | 0.01 | $ | — | ||||||||
Basic and diluted, weighted average shares outstanding, Class B non-redeemable ordinary shares | 5,372,415 | 6,250,000 | 5,372,415 | 6,250,000 | ||||||||||||
Basic and diluted net income (loss) per share, Class Bnon-redeemable ordinary shares | $ | 0.03 | $ | (0.00 | ) | $ | 0.01 | $ | (0.00 | ) | ||||||
Class A Ordinary Shares subject to redemption | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of December 31, 2021 | 21,489,658 | $ | 219,194,512 | 5,372,415 | $ | 537 | $ | — | $ | (6,724,379 | ) | $ | (6,723,842 | ) | ||||||||||||||
Accretion for Class A Common Stock to redemption value | 227,005 | (227,005 | ) | (227,005 | ) | |||||||||||||||||||||||
Net loss | — | — | — | — | — | (536,771 | ) | (536,771 | ) | |||||||||||||||||||
Balance as of June 30, 2022 | 21,489,658 | $ | 219,421,517 | 5,372,415 | $ | 537 | $ | — | $ | (7,488,155 | ) | $ | (7,487,618 | ) | ||||||||||||||
Accretion for Class A Common Stock to redemption value | 959,949 | (959,949 | ) | (959,949 | ) | |||||||||||||||||||||||
Net income | — | — | — | — | — | 678,708 | 678,708 | |||||||||||||||||||||
Balance as of September 30, 2022 | 21,489,658 | $ | 220,381,466 | 5,372,415 | $ | 537 | $ | — | $ | (7,769,396 | ) | $ | (7,768,859 | ) | ||||||||||||||
Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit | |||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance as of December 31, 2022 | 5,372,415 | $ | 537 | $ | — | $ | (7,801,151 | ) | $ | (7,800,614 | ) | |||||||||
Accretion for Class A Common Stock to redemption value | — | — | — | (2,358,022 | ) | (2,358,022 | ) | |||||||||||||
Partial waiver of deferred underwriters’ discount | 3,760,690 | — | 3,760,690 | |||||||||||||||||
Net income | — | — | — | 2,105,779 | 2,105,779 | |||||||||||||||
Balance as of March 31, 2023 | 5,372,415 | $ | 537 | $ | 3,760,690 | $ | (8,053,394 | ) | $ | (4,292,167 | ) | |||||||||
Class A Ordinary Shares subject to redemption | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Equity | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance as of February 2, 2021 (inception) | 21,489,658 | $ | 219,194,512 | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Class B ordinary shares issued to Sponsor | — | — | 5,750,000 | 575 | 24,425 | — | 25,000 | |||||||||||||||||||||
Net loss | — | — | — | — | — | (8,663 | ) | (8,663 | ) | |||||||||||||||||||
Balance as of June 30, 2021 | 21,489,658 | $ | 219,194,512 | 5,750,000 | $ | 575 | $ | 24,425 | $ | (8,663 | ) | $ | 16,337 | |||||||||||||||
Net loss | — | — | — | — | — | (1,409 | ) | (1,409 | ) | |||||||||||||||||||
Balance as of September 30, 2021 | 21,489,658 | $ | 219,194,512 | 5,750,000 | $ | 575 | $ | 24,425 | $ | (10,072 | ) | $ | 14,928 | |||||||||||||||
Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit | |||||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance as of December 31, 2021 | 5,372,415 | $ | 537 | $ | — | $ | (6,724,379 | ) | $ | (6,723,842 | ) | |||||||||
Net loss | — | — | — | (441,116 | ) | (441,116 | ) | |||||||||||||
Balance as of March 31, 2022 | 5,372,415 | $ | 537 | $ | — | $ | (7,165,495 | ) | $ | (7,164,958 | ) | |||||||||
For the nine months ended September 30, 2022 | For the period from February 2, 2021 (inception) through September 30, 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 141,937 | $ | (10,072 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Formation costs paid by Sponsor | — | 10,072 | ||||||
Interest earned on investment held in Trust Account | (1,177,415 | ) | — | |||||
Change in fair value of overallotment liability | (30,207 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 184,423 | — | ||||||
Accounts payable and accrued expenses | 135,713 | — | ||||||
Due to related party | 90,000 | — | ||||||
Net cash used in operating activities | (655,549 | ) | — | |||||
Cash flow from a financing activity: | ||||||||
Payment of promissory note—related party | (42,156 | ) | — | |||||
Net cash used in a financing activity | (42,156 | ) | — | |||||
Net change in cash | (697,705 | ) | — | |||||
Cash, beginning of the period | 1,006,074 | — | ||||||
Cash, end of the period | $ | 308,369 | $ | — | ||||
Supplemental disclosure of cash flow information: | ||||||||
Accretion for Class A Common Stock to redemption | $ | 1,186,954 | $ | — | ||||
Deferred offering costs paid by the Sponsor under the promissory note | $ | — | $ | 26,706 | ||||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ | — | $ | 14,928 | ||||
Deferred offering costs included in accounts payable and accrued expenses | $ | — | $ | 620,702 | ||||
For the Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 2,105,779 | $ | (441,116 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Interest earned on investment held in Trust Account | (2,358,022 | ) | (57,465 | ) | ||||
Change in fair value of overallotment liability | — | (30,207 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 4,412 | 22,931 | ||||||
Accounts payable and accrued expenses | 19,144 | 310,265 | ||||||
Due to related party | 30,000 | 30,000 | ||||||
Net cash used in operating activities | (198,687 | ) | (165,592 | ) | ||||
Cash flow from a financing activity: | ||||||||
Payment of promissory note—related party | — | (42,156 | ) | |||||
Net cash used in a financing activity | — | (42,156 | ) | |||||
Net change in cash | (198,687 | ) | (207,748 | ) | ||||
Cash, beginning of the period | 394,251 | 1,006,074 | ||||||
Cash, end of the period | $ | 195,564 | $ | 798,326 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Impact of partial waiver of deferred underwriters’ fee | $ | 3,760,690 | $ | — | ||||
Accretion for Class A Common Stock to redemption | $ | 2,358,022 | $ | — | ||||
Carrying Value as of September 30, 2022 | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of September 30, 2022 | |||||||||||||
U.S. Treasury Securities Fund | $ | 220,381,467 | $ | — | $ | — | $ | 220,381,467 |
Carrying Value as of December 31, 2021 | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of December 31, 2021 | |||||||||||||
U.S. Treasury Securities (matured September 16, 2022) | $ | 219,204,052 | $ | — | $ | (24,956 | ) | $ | 219,179,096 |
Carrying Value as of March 31, 2023 | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of March 31, 2023 | |||||||||||||
U.S. Treasury Securities Fund | $ | 224,592,707 | $ | — | $ | — | $ | 224,592,707 | ||||||||
Carrying Value as of December 31, 2022 | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of December 31, 2022 | |||||||||||||
U.S. Treasury Securities Fund | $ | 222,234,685 | $ | — | $ | — | $ | 222,234,685 |
Gross proceeds | $ | 214,896,580 | $ | 214,896,580 | ||||
Less: | ||||||||
Proceeds allocated to Public Warrants | (2,865,288 | ) | (2,865,288 | ) | ||||
Class A ordinary shares issuance costs | (12,738,617 | ) | (12,738,617 | ) | ||||
Plus: | ||||||||
Remeasurement of carrying value to redemption value | 21,088,791 | 22,942,009 | ||||||
Class A ordinary shares subject to possible redemption | $ | 220,381,466 | ||||||
Class A ordinary shares subject to possible redemption, December 31, 2022 | 222,234,685 | |||||||
Plus: | ||||||||
Remeasurement of carrying value to redemption value | 2,358,022 | |||||||
Class A ordinary shares subject to possible redemption, March 31, 2023 | $ | 224,592,707 | ||||||
For the three months ended September 30, | For the nine months ended September 30, | For the period from February 2, 2021 (inception) through September 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Class A ordinary shares subject to possible redemption | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income allocable to Class A ordinary shares subject to possible redemption | $ | 542,966 | $ | — | $ | 113,550 | $ | — | ||||||||
Denominator: | ||||||||||||||||
Weighted Average Class A ordinary shares subject to possible redemption, basic and diluted | 21,489,658 | — | 21,489,658 | — | ||||||||||||
Basic and Diluted net income per share, Class A ordinary shares subject to possible redemption | $ | 0.03 | $ | — | $ | 0.01 | $ | — | ||||||||
Class B non-redeemable ordinary shares | ||||||||||||||||
Numerator: | ||||||||||||||||
Net income (loss) allocable to Class B ordinary shares | $ | 135,742 | $ | — | $ | 28,387 | $ | (10,072 | ) | |||||||
Denominator: | ||||||||||||||||
Weighted Average Class B ordinary shares, basic and diluted | 5,372,415 | 6,250,000 | 5,372,415 | 6,250,000 | ||||||||||||
Basic and diluted net income (loss) per share, Class B ordinary shares | $ | 0.03 | $ | (0.00 | ) | $ | 0.01 | $ | (0.00 | ) | ||||||
For the Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income (loss) per ordinary share | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income (loss), as adjusted | $ | 1,684,623 | $ | 421,156 | $ | (352,893 | ) | $ | (88,223 | ) | ||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average shares outstanding | 21,489,658 | 5,372,415 | 21,489,658 | 5,372,415 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | $ | 0.08 | $ | 0.08 | $ | (0.02 | ) | $ | 0.02 | ) |
September 30, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
U.S. Treasury Securities Fund | $ | 220,381,467 | $ | 220,381,467 | $ | — | $— | |||||||||
$ | 220,381,467 | $ | 220,381,467 | $ | — | $— | ||||||||||
March 31, 2023 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
U.S. Treasury Securities Fund | $ | 224,592,707 | $ | 224,592,707 | $ | — | $ | — | ||||||||
$ | 224,592,707 | $ | 224,592,707 | $ | — | $ | — | |||||||||
December 31, 2022 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
U.S. Treasury Securities Fund | $ | 222,234,685 | $ | 222,234,685 | $ | — | $ | — | ||||||||
$ | 222,234,685 | $ | 222,234,685 | $ | — | $ | — | |||||||||
December 31, 2021 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
U.S. Treasury Securities | $ | 219,179,096 | $ | 219,179,096 | $ | — | $— | |||||||||
$ | 219,179,096 | $ | 219,179,096 | $ | — | $— | ||||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “Target Global Acquisition I Corp.,” “our,” “us” or “we” refer to Target Global Acquisition I Corp. The following discussion and analysis of our 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 February 2, 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”).
Our sponsor is Target Global Sponsor Ltd., a Cayman Islands company limited by shares (the “Sponsor”). The registration statement for our initial public offering was declared effective on December 8, 2021. On December 13, 2021, we commenced our initial public offering (the “IPO”) of 20,000,000 units at $10.00 per unit. Transaction costs related to the IPO amounted to $12,535,264 consisting of $4,000,000 of underwriting commissions, $7,000,000 of deferred underwriting commissions (including the portion of the deferred underwriting commission subsequently waived by BofA Securities Inc., one of the two underwriters of our IPO (“BofA”) on January 10, 2023), $510,000 in value of the over-allotment option, and $1,025,264 of other offering costs.
Simultaneously with the consummation of the IPO, we consummated the private placement of 6,666,667 warrants (the “Private Placement Warrants”) to the Sponsor, at a price of $1.50 per Private Placement Warrant in a private placement. The sale of the Private Placement Warrants in connection with the IPO generated gross proceeds of $10,000,000.
On December 29, 2021, the underwriters partially exercised their over-allotment option, resulting in an additional 1,489,658 Units issued for gross proceeds of $14,896,580.
Following the closing of the IPO on December 13, 2021, and the subsequent close of the partial over-allotment option on December 29, 2021, a total of $219,194,512 from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was deposited into a trust account (the “Trust Account”) and will be invested only in U.S. government securities, within the meaning set forth in 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 Rule
17
Our amended and restated memorandum and articles of association provides that we will have only 18 months from the closing of the IPO (or up to 24 months from the closing of the IPO if we extend the period of time to consummate a Business Combination, subject to the Sponsor depositing additional funds in the Trust Account) (the “Combination Period”) to consummate the initial Business Combination. If we have not consummated an initial Business Combination within the Combination Period, 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 aper-sharea per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and board of directors, liquidate and dissolve, subject in the case of (ii) and (iii) above, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial Business Combination within the Combination Period.
Liquidity, and Capital Resources
As of September 30, 2022,March 31, 2023, we had cash outside the Trust Account of $308,369,$195,564, available for working capital needs, and working deficit of $247,480.$531,477. Until consummation of its Business Combination, we will be using the funds held outside the Trust Account, and any additional Working Capital Loans from the initial shareholders, our officers and directors, or their respective affiliates, or other third parties, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
Our liquidity needs up to September 30, 2022March 31, 2023 had been satisfied through a payment from the Sponsor of $25,000 for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of up to $500,000. As of September 30, 2022,March 31, 2023, we had no$500,000 borrowing outstanding borrowing under the promissory note.
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, initial shareholders, officers, directors or their affiliates may, but are not obligated to, provide us Working Capital Loans. As of September 30, 2022,March 31, 2023, there were no amounts outstanding under any Working Capital Loans.
We have until 18 months from the closing of the IPO (which happened on the foregoing, management believesDecember 13, 2021) to complete a Business Combination. However, if we anticipate that we will have sufficient working capital and borrowing capacitymay not be able to meet our needs through the earlier of the consummation ofconsummate a Business Combination or one year from this filing. Over thiswithin 18 months (through June 13, 2023), we may extend the period of time period,to consummate a Business Combination by up to two additional three-month periods (for a total of 24 months to complete a Business Combination. However, if we are unable to complete a business combination within the Combination Period, we will redeem 100% of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us, divided by the number of then outstanding public shares, subject to applicable law and as further described in our registration statement, and then seek to dissolve and liquidate. In connection with the our assessment of going concern considerations in accordance with the authoritative guidance FASB Accounting Standards Update (“ASU”) Topic 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern”, our management has determined that potential liquidity and capital shortage as described above and a mandatory liquidation, and subsequent dissolution, should we be using these funds for paying existing accounts payable, identifyingunable to complete a business combination, raise substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target businessliabilities should we be required to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Risks and Uncertainties
Our management is currently evaluating the impact of the COVID-19 pandemic,current global economic uncertainty, rising interest rates, high inflation, high energy prices, supply chain disruptions and the Russia-Ukraine wararmed conflict (including the impact of any sanctions imposed in response thereto) and has concluded that while it is reasonably possible that any of these could have a negative effect on our financial position, results of our operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
As of September 30, 2022,March 31, 2023, we had not commenced any operations. All activity for the period from February 2, 2021 (inception) through September 30, 2022March 31, 2023 relates to our formation and the IPO. We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after the completion of our initial Business Combination, at the earliest. We generate
For the three months ended September 30, 2022,March 31, 2023, we had net income of $678,708,$2,105,779, which consisted of income from investments held in the Trust Account and operating account of $959,949,$2,358,021, offset by general and administrative expenses of $281,241.$252,242.
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For the ninethree months ended September 30,March 31, 2022, we had net incomeloss of $141,937,$441,116, which consisted of general and administrative expenses of approximately $528,788, offset by the income from investments held in the Trust Account and operating account of $1,177,415approximately $57,465 and change in fair value of overallotment liability of $30,207, offset by general and administrative expenses of $1,065,685.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.
Office Space, Secretarial and Administrative Services
Commencing on December 9, 2021, through the earlier of consummation of the initial Business Combination and the liquidation, we agreed to pay the Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support and to reimburse the Sponsor for any
Registration Rights
The holders of the Founder Shares, Private Placement Warrants, Class A ordinary shares underlying the Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and 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 Working Capital Loans and extension loans) will beare entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the Public Offering.agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters had a
The underwriters were paid underwriting commissioncommissions of $0.20 per unit, or $4,000,000 in aggregate, upon the closing of the IPO. Following the exercise of the underwriters’ over-allotment option on December 29, 2021, the underwriters earned an additional $297,932 for an aggregate of $4,297,932 in underwriting commissions related to the IPO and over-allotment.
In addition, $7,000,000 iswas payable to the underwriters for deferred underwriting commissions.commissions (including the portion of the deferred underwriting commissions subsequently waived by BofA on January 10, 2023). Following the exercise of the underwriters’ over-allotment option on December 29, 2021, the underwriters earned an additional $521,380 for an aggregate of $7,521,380 in deferred underwriting commissions related to the IPO and over-allotment. Theover-allotment (including the portion of the deferred underwriting commission will become payablesubsequently waived by BofA). On January 10, 2023, BofA executed a waiver letter confirming BofA’s resignation and waiver of its entitlement to the underwriterspayment of deferred underwriting commission in the amount of $3,760,690. The remaining balance of $3,760,690 owing to UBS has not been waived and remains due and payable 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.
Forward Purchase Agreements
We entered into two forward purchase agreements (the “Forward Purchase Agreements”) with Target Global Selected Opportunities, LLC – Series Selenium (“TGSO Series Selenium”) on November 8, 2021, pursuant to which TGSO Series Selenium agreed to purchase (1) an aggregate of 2,500,000 forward purchase shares for $10.00 per share (the “firm forward purchase shares”), or an aggregate amount of $25,000,000 and (2) in addition, an aggregate of up to 2,500,000 forward purchase shares for $10.00 per share (the “additional forward purchase shares”), or an aggregate maximum amount of up to $25,000,000, in each case in a private placement that may close simultaneously with the closing of the Business Combination. On May 11, 2022, all of TGSO Series Selenium’s rights and obligations under the Forward Purchase Agreements (including the obligation to purchase the Forward Purchase Shares) were transferred in full to Target Global Selected Opportunities, LLC – Series Selenium 3 (the “FPA Purchaser”) in accordance with Section 4(c) of the Forward Purchase Agreements.
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Critical Accounting Policies
Offering Costs Associated with IPO
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the IPO. We comply with the requirements of the ASC
Ordinary Shares Subject to Possible Redemption
We account for ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, 21,489,658 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our balance sheets.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of Class A ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Net Income (Loss) Per Ordinary Share
Net income (loss) per ordinary share is computed by dividing net income (loss) by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture by the Sponsor. Weighted average shares were reduced for the effect of an aggregate of 750,000 ordinary shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters. At September 30, 2022March 31, 2023 and December 31, 2021,2022, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then share in our earnings. As a result, diluted income (loss) per ordinary share is the same as basic lossincome (loss) per share for the period presented.
Recent Accounting Standards
Our management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements.
Off-Balance
As of September 30, 2022March 31, 2023 and December 31, 2021,2022, we did not have any
Emerging Growth Company Status
We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
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.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our prospectus filed with the SECAnnual Report on October 21, 2021 and in our Annual ReportForm 10-K for the year ended December 31, 2021.2022 filed with SEC on March 28, 2023. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
After our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of our revenue will be derived from our operations in such country. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we operate.
The economic, political and social conditions, as well as government policies, of the country in which our operations are located could affect our business. Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future. If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries. A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial business combination and if we effect our initial business combination, the ability of that target business to become profitable.
We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine. Our business, financial condition and results of operations may be materially and adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.
Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.
Any of the above mentioned factors could affect our business, prospects, financial condition, and operating results. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in theour Initial Public Offering Prospectus or the Annual Report on Form 10-K for the year ended December 31, 2021.2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not Applicable.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
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Item 5. Other Information.
None.
Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
* | Filed herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TARGET GLOBAL ACQUISITION I CORP. | ||||||
Date: | By: | /s/ Shmuel Chafets | ||||
Name: | Shmuel Chafets | |||||
Title: | Chief Executive Officer | |||||
Date: May 15, 2023 | By: | /s/ Heiko Dimmerling | ||||
Name: | Heiko Dimmerling | |||||
Title: | Principal Financial and Chief |