☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2023
☐ TRANSITION 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 |
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| |
Cayman Islands | 98-1616250 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
135 th FloorNew York, NY | 10010 | |
(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 and one-half of one redeemable warrant | UTAAU | The Nasdaq Stock Market LLC | ||
Class A ordinary shares, par value $0.0001 per share | UTAA | The Nasdaq Stock Market LLC | ||
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 per share | UTAAW | The Nasdaq Stock Market LLC |
Large accelerated filer |
| ☐ | Accelerated filer | ☐ | ||
Non-accelerated filer |
| ☒ | Smaller reporting company | ☒ | ||
Emerging growth company |
| ☒ |
Table of Contents
Page | ||||||
PART I. | ||||||
Item 1. |
| ii | ||||
| 2 | |||||
| 3 | |||||
| 4 | |||||
| 5 | |||||
Notes to Unaudited Condensed |
| 6 | ||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 14 | |||
Item 3. |
| 17 | ||||
Item 4. |
| 17 | ||||
PART II. | ||||||
Item 1. |
| 18 | ||||
Item 1A. |
| 18 | ||||
Item 2. |
| 18 | ||||
Item 3. |
| 18 | ||||
Item 4. |
| 18 | ||||
Item 5. |
| 18 | ||||
Item 6. |
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| 19 |
*For information on how to set up your TOC with hyperlinks as well as updatable page numbers, please see Knowledge and Communities article “Updating the Table of Contents”
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
ii
1
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| 2 | |||
| 3 | |||
| 4 | |||
| 5 | |||
| 6 |
F-1
(Unaudited)
|
| September 30, 2021 |
| |
Assets: |
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|
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Prepaid expenses |
| $ | 25,000 |
|
Deferred offering costs associated with the proposed public offering |
|
| 421,440 |
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Total assets |
| $ | 446,440 |
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Liabilities and Stockholder's Equity: |
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|
|
|
Current liabilities |
|
|
|
|
Accrued expenses |
| $ | 16,505 |
|
Accrued offering costs |
|
| 299,915 |
|
Promissory note - related party |
|
| 121,525 |
|
Total Current Liabilities |
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| 437,945 |
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Commitments and Contingencies |
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|
|
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Shareholder’s Equity: |
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|
|
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Preference shares, $0.0001 par value; 1,000,000 shares authorized, NaN issued and outstanding |
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| — |
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Class A ordinary shares, $0.0001 par value; 80,000,000 shares authorized; NaN issued and outstanding |
|
| — |
|
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding(1)(2) |
|
| 575 |
|
Additional paid-in capital |
|
| 24,425 |
|
Accumulated deficit |
|
| (16,505 | ) |
Total Shareholder’s Equity |
|
| 8,495 |
|
Total Liabilities and Shareholder’s Equity |
| $ | 446,440 |
|
(1) Includes up to 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 4).
(2) In November 2021, the Sponsor surrendered 1,437,500 Class B ordinary shares for 0 consideration, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding. All share and per-share amounts have been retroactively restated to reflect the share surrender (see Note 7).
June 30, 2023 (Unaudited) | December 31, 2022 | |||||||
Assets: | ||||||||
Cash | $ | 24,603 | $ | 153,968 | ||||
Restricted cash held in Trust Account | — | 869 | ||||||
Prepaid expenses | 301,195 | 549,405 | ||||||
Marketable securities held in Trust Account | 243,390,357 | 237,994,037 | ||||||
Total assets | $ | 243,716,155 | $ | 238,698,279 | ||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | ||||||||
Current liabilities | ||||||||
Accrued expenses | $ | 228,545 | $ | 90,385 | ||||
Related Party Payable | 180,000 | 120,000 | ||||||
Working capital loan - related party | 835,993 | 577,992 | ||||||
Deferred underwriters fee | 8,050,000 | 8,050,000 | ||||||
Total liabilities | 9,294,538 | 8,838,377 | ||||||
Commitments and Contingencies (Note 5) | ||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value, 23,000,000 shares outstanding at redemption value | 243,390,356 | 237,994,906 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 1,000,000 shares authorized, none issued and outstanding | — | — | ||||||
Class A ordinary shares, $0.0001 par value; 80,000,000 shares authorized; none issued and outstanding, excluding 23,000,000 shares subject to possible redemption | — | — | ||||||
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding | 575 | 575 | ||||||
Additional paid-in capital | — | — | ||||||
Accumulated deficit | (8,969,314 | ) | (8,135,579 | ) | ||||
Total Shareholders’ Deficit | (8,968,739 | ) | (8,135,004 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 243,716,155 | $ | 238,698,279 | ||||
F-2
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| For the period from July 15, 2021 (inception) through September 30, 2021 |
| |
Formation and operating costs |
| $ | 16,505 |
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Net loss |
| $ | (16,505 | ) |
Weighted average shares outstanding, basic and diluted(1)(2) |
|
| 5,000,000 |
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Basic and diluted net loss per ordinary share |
| $ | (0.00 | ) |
(1) Excludes up to 750,000 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriter (see Note 4).
(2) In November 2021, the Sponsor surrendered 1,437,500 Class B ordinary shares for 0 consideration, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding. All share and per-share amounts have been retroactively restated to reflect the share surrender (see Note 7).
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Formation and operating costs | $ | 301,124 | $ | 282,455 | $ | 833,735 | $ | 656,827 | ||||||||
Loss from operations | (301,124 | ) | (282,455 | ) | (833,735 | ) | (656,827 | ) | ||||||||
Realized and unrealized gain on marketable securities held in trust | — | 123,065 | 1,440,963 | 8,280 | ||||||||||||
Interest income on securities held in trust | 2,867,725 | 174,841 | 3,954,487 | 233,521 | ||||||||||||
Net income (loss) | $ | 2,566,601 | $ | 15,451 | $ | 4,561,715 | $ | (415,026 | ) | |||||||
Weighted average shares outstanding of class A ordinary shares subject to possible redemption, basic and diluted | 23,000,000 | 23,000,000 | 23,000,000 | 23,000,000 | ||||||||||||
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | $ | 0.11 | $ | 0.00 | $ | 0.21 | $ | (0.01 | ) | |||||||
Weighted-average Class B ordinary outstanding, basic and diluted, non-redeemable shares | $ | 5,750,000 | $ | 5,750,000 | $ | 5,750,000 | $ | 5,750,000 | ||||||||
Basic and diluted net loss per share, Class B non-redeemable ordinary shares | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | ||||
F-3
(Unaudited)
|
| Class B Ordinary |
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| Additional |
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| Accumulated |
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| Shareholder’s |
| ||||||||
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| Shares(1) |
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| Paid-in |
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| Deficit |
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| Equity |
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| Shares |
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| Amount |
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| Capital |
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| |||
Balance – July 15, 2021 (Inception) |
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| 0 |
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| $ | 0 |
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| $ | 0 |
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| $ | 0 |
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| $ | 0 |
|
Issuance of Class B ordinary shares to Sponsor (1)(2) |
|
| 5,750,000 |
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| 575 |
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|
| 24,425 |
|
|
| — |
|
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| 25,000 |
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Net loss |
|
| — |
|
|
| — |
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|
| — |
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|
| (16,505 | ) |
|
| (16,505 | ) |
Balance – September 30, 2021 |
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| 5,750,000 |
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| $ | 575 |
|
| $ | 24,425 |
|
| $ | (16,505 | ) |
| $ | 8,495 |
|
(1) Includes upStockholders’ Deficit and Class A Shares Subject to 750,000 Class B ordinary shares subject to forfeiture ifPossible Redemption
Class A Ordinary Shares Subject to Possible Redemption | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance – December 31, 2022 | 23,000,000 | $ | 237,994,906 | 5,750,000 | $ | 575 | $ | — | $ | (8,135,579 | ) | $ | (8,135,004 | ) | ||||||||||||||
Accretion of Class A ordinary shares to redemption value | — | 2,527,725 | — | — | — | (2,527,725 | ) | (2,527,725 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 1,995,114 | 1,995,114 | |||||||||||||||||||||
Balance – March 31, 2023 | 23,000,000 | $ | 240,522,631 | 5,750,000 | $ | 575 | $ | — | $ | (8,668,190 | ) | $ | (8,667,615 | ) | ||||||||||||||
Accretion of Class A ordinary sh are s to redemptionvalue | — | 2,867,725 | — | — | — | (2,867,725 | ) | (2,867,725 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 2,566,601 | 2,566,601 | |||||||||||||||||||||
Balance – June 30, 2023 | 23,000,000 | $ | 243,390,356 | 5,750,000 | $ | 575 | $ | — | $ | (8,969,314 | ) | $ | (8,968,739 | ) | ||||||||||||||
(2) In November 2021, the Sponsor surrendered 1,437,500 Class B ordinary shares for 0 consideration, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding. All shareThree and per-share amounts have been retroactively restated to reflect the share surrender (see Note 7).
Six Months Ended June 30, 2022
Class A ordinary shares subject to possible redemption | Class B Ordinary Shares | Additional Paid-in Capital | Accumulated Deficit | Shareholders’ Deficit | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance – December 31, 2021 | 23,000,000 | $ | 234,606,064 | 5,750,000 | $ | 575 | $ | — | $ | (6,854,636 | ) | $ | (6,854,061 | ) | ||||||||||||||
Accretion of Class A ordinary shares to redemption value | — | (56,105 | ) | — | — | — | 56,105 | 56,105 | ||||||||||||||||||||
Net loss | — | — | — | — | — | (430,477 | ) | (430,477 | ) | |||||||||||||||||||
Balance – March 31, 2022 | 23,000,000 | $ | 234,549,959 | 5,750,000 | $ | 575 | $ | — | $ | (7,229,008 | ) | $ | (7,228,433 | ) | ||||||||||||||
Accretion of Class A ordinary shares to redemption value | — | 297,906 | — | — | — | (297,906 | ) | (297,906 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 15,451 | 15,451 | |||||||||||||||||||||
Balance – June 30, 2022 | 23,000,000 | $ | 234,847,865 | 5,750,000 | $ | 575 | $ | — | $ | (7,511,463 | ) | $ | (7,510,888 | ) | ||||||||||||||
F-4
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| For the period from July 15, 2021 (inception) through September 30, 2021 |
| |
Cash flows from Operating Activities: |
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|
|
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Net loss |
| $ | (16,505 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Change in accrued expenses |
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| 16,505 |
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Net cash used in operating activities |
|
| — |
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Net Change in Cash |
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| 0 |
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Cash – Beginning |
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| — |
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Cash – Ending |
| $ | — |
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Supplemental disclosure of non-cash investing and financing activities: |
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Deferred offering costs included in accrued offering costs |
| $ | 299,915 |
|
Deferred offering costs funded by Sponsor in exchange for promissory note |
| $ | 121,525 |
|
Prepaid offering and formation costs funded by Sponsor in exchange for Founder Shares |
| $ | 25,000 |
|
For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 4,561,715 | $ | (415,026 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Realized and u nrealized gain on marketable securities held in trust | (1,440,963 | ) | (241,801 | ) | ||||
Change in accrued interest included in marketable securities held in trust | (1,007,769 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 248,210 | 274,600 | ||||||
Accrued expenses and related party payable | 198,160 | (30,269 | ) | |||||
Net cash provided by (used in) operating activities | 2,559,353 | (412,496 | ) | |||||
Cash flows from investing activities: | ||||||||
Proceeds from redemption of marketable securities held in trust account | 239,435,000 | 234,718,663 | ||||||
Investment in marketable securities held in trust account | (242,382,588 | ) | (234,718,663 | ) | ||||
Net cash used in investing activities | (2,947,588 | ) | — | |||||
Cash flows from financing activities: | ||||||||
Cash proceeds from working capital loan | 258,001 | — | ||||||
Net cash provided by financing activities | 258,001 | — | ||||||
Net change in cash and restricted cash | (130,234 | ) | (412,496 | ) | ||||
Cash and restricted cash – beginning of period | 154,837 | 416,437 | ||||||
Cash and restricted cash – end of period | $ | 24,603 | $ | 3,941 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Accretion of Class A ordinary shares to redemption value | $ | 5,395,450 | $ | (241,801 | ) |
F-5
and Financing
F-6
UTA Acquisition Corporation
Notes to the Financial Statements
TheCompanywillprovideholdersoftheCompany’soutstandingClassAordinary shares,parvalue$0.0001pershare,soldinthe ProposedPublicOffering(the“PublicShareholders”),theopportunitytoredeemalloraportionoftheirPublicShares(asdefinedbelow)uponthe completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) without a stockholder vote by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conductatenderofferwillbemadebytheCompany,solelyinitsdiscretion.ThePublicShareholderswillbeentitledtoredeemtheirPublicSharesfora prorataportionoftheamountthenheldintheTrustAccount(initiallyanticipated Account. The
F-7
UTA Acquisition Corporation
Notes to the Financial Statements
$10.20.
concern.
F-8
UTA Acquisition Corporation
Notes to2022 filed by the Financial Statements
Company with the SEC.
Further, Section 102(b)(1) of the JOBS Actwhich exempts emerging growth companies from being required to complycompliance 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 an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.
Deferred account.
Deferred offering
F-9
UTA Acquisition Corporation
Notes to the Financial Statements
or recorded.
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net income (loss) | $ | 2,566,601 | $ | 15,451 | $ | 4,561,715 | $ | (415,026 | ) | |||||||
Accretion of temporary equity to redemption value | (2,867,725 | ) | (297,906 | ) | (5,395,450 | ) | (241,801 | ) | ||||||||
Net loss including accretion of temporary equity to redemption value | (301,124 | ) | (282,455 | ) | (833,735 | ) | (656,827 | ) |
For the Three Months Ended June 30, 2023 | For the Six Months Ended June 30, 2023 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Numerator: | ||||||||||||||||
Total income (loss) | 2,053,281 | 513,320 | 3,649,372 | 912,343 | ||||||||||||
Less: Accretion allocated based on ownership percentage | (2,294,180 | ) | (573,545 | ) | (4,316,360 | ) | (1,079,090 | ) | ||||||||
Plus: accretion applicable to Class A redeemable Shares | 2,867,725 | 5,395,450 | ||||||||||||||
Total income (loss) by Class | $ | 2,626,826 | $ | (60,225 | ) | 4,728,462 | $ | (166,747 | ) | |||||||
Denominator : | ||||||||||||||||
Weighted average shares | 23,000,000 | 5,750,000 | 23,000,000 | 5,750,000 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | 0.11 | (0.01 | ) | 0.21 | (0.03 | ) |
For the Three Months Ended June 30, 2022 | For the Six Months Ended June 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Numerator: | ||||||||||||||||
Total income (loss) allocated by Class | 12,361 | 3,090 | (332,021 | ) | (83,005 | ) | ||||||||||
Less: Accretion allocated based on ownership percentage | (238,325 | ) | (59,581 | ) | (193,441 | ) | (48,360 | ) | ||||||||
Plus: accretion applicable to Class A redeemable Shares | 297,906 | — | 241,801 | — | ||||||||||||
Total income (loss) by Class | $ | 71,942 | $ | (56,491 | ) | (283,661 | ) | $ | (131,365 | ) | ||||||
Denominator : | ||||||||||||||||
Weighted average shares | 23,000,000 | 5,750,000 | 23,000,000 | 5,750,000 | ||||||||||||
Basic and diluted net income (loss) per ordinary share | 0.00 | (0.01 | ) | (0.01 | ) | (0.02 | ) |
FASB
presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
F-10
UTA Acquisition Corporation
Notes to the Financial Statements
Pursuant to the Proposed Public Offering,
The Company will grant the underwriters a 45-day option from the date of the final prospectus relatingPrivate Placement Warrant, to the Proposed Public OfferingSponsor, generating gross proceeds to purchase up to 3,000,000 additional Class A ordinary shares to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts, and commissions.
Company of $11,200,000.
F-11
UTA Acquisition Corporation
Notes to the Financial Statements
independent director nominees.
The Sponsor has agreed to purchase an aggregate
Promissory Note—Related Party
On July 22, 2021,
registration rights.
The
F-12
UTA Acquisition Corporation
Notes The Sponsor subsequently agreed to waive any fees that would have been payable by the Financial Statements
Company under the agreement for the month of December 2021. For the three and six months ended June 30,
No such expenditures were incurred for the three and six months ended June 30, 2023 and 2022.
Contingencies
these uncertainties.
Class A ordinary shares subject to possible redemption - December 31, 2022 | $ | 237,994,906 | ||
Plus: | ||||
Accretion of carrying value to redemption value | 5,395,450 | |||
Class A ordinary shares subject to possible redemption - June 30, 2023 | $ | 243,390,356 |
Class A ordinary shares subject to possible redemption - December 31, 2021 | $ | 234,606,064 | ||
Plus: | ||||
Accretion of carrying value to redemption value | 241,801 | |||
Class A ordinary shares subject to possible redemption - June 30, 2022 | $ | 234,847,865 |
and outstanding, all subject to possible redemption and classified as temporary equity in the accompanying balance sheet (see Note 6).
outstanding.
F-13
UTA Acquisition Corporation
Notes to the Financial Statements
Warrants—NaN warrants are currently outstanding as
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F-14
UTA Acquisition Corporation
Notes to the Financial Statements
The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Proposed Public Offering, except that the Private Placement Warrants and ordinary shares issuable upon the exercise may be subject to certain transfer restrictions contained in the letter agreement by and among the Company, the Sponsor and any other parties thereto, as amended from time to time, including that any permitted transferees must enter into a written agreement with the Company agreeing to be bound by the transfer restrictions contained in such letter agreement. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis and be non-redeemable.
Note 7—Subsequent Events
In November 2021, the Sponsor transferred 25,000 Founder Shares each to Nancy Tellem and Alexis Ohanian, the Company’s independent director nominees.
In November 2021, the Sponsor surrendered an aggregate of 1,437,500 Founder Shares for 0 consideration, resulting in an aggregate of 5,750,000 Class B ordinary shares outstanding. All share and per share amounts have been retroactively restated to reflect the share surrender.
On December 6, 2021, the Company consummated its initial public offering (the “IPO”) of 23,000,000 units (the “Units”), including the issuance of 3,000,000 Units as a result of the underwriter’s exercise of its over-allotment option. Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (an “Ordinary Share”), and one-half of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one Ordinary Share for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $230,000,000.
Substantially concurrently with the closing of the IPO, the Company completed the private sale of 11,200,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant, to the Sponsor, generating gross proceeds to the Company of $11,200,000.
F-15
UTA Acquisition Corporation
Notes to the Financial Statements
A total of $234,600,000, comprised of proceeds from the IPO and the sale of the Private Placement Warrants, was placed in the Trust Account, a U.S.-based trust account at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest to occur of: (1) the completion of the Company’s initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of its public shares if the Company does not complete its initial business combination within 21 months from the closing of the IPO or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of the Company’s public shares if the Company has not completed its initial business combination within 21 months from the closing of the IPO, subject to applicable law.
Substantially concurrently with the closing of the IPO, the Company and its Sponsor agreed to transfer $300,000 of debt outstanding on the Company’s Promissory
8—Subsequent Events
F-16
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to UTA Acquisition Corporation. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to UTA Acquisition Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly 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 includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks anduncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering (as defined below) filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s filings with the SEC can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a newly incorporated blank check company, incorporated as a Cayman Islands exempted company on July 15, 2021 for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We have not selected any business combination target and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any business combination target. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, shares and debt.
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On December 6, 2021, we consummated our initial public offering (the “IPO”) of 23,000,000 units (the “Units”), including the issuance of 3,000,000 Units as a result of the underwriter’s exercise of its over-allotment option. Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (an “Ordinary Share”), and one-half of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one Ordinary Share for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $230,000,000.
Substantially concurrently with the closing of the IPO, we completed the private sale of 11,200,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant, to the sponsor, generating gross proceeds of $11,200,000.
A total of $234,600,000, comprised of proceeds from the IPO and the sale of the Private Placement Warrants, was placed in the Trust Account, a U.S.-based trust account at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the funds held in the Trust Account will not be released from the Trust Account until the earliest to occur of: (1) the completion of the Company’s initial business combination; (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial business combination or to redeem 100% of its public shares if the Company does not complete its initial business combination within 21 months from the closing of the IPO or (B) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity; and (3) the redemption of the Company’s public shares if the Company has not completed its initial business combination within 21 months from the closing of the IPO, subject to applicable law.
Business Combination
If we are unable to complete a business combination within 21 months from the closing of the initial public offering (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 a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (less amounts released to pay taxes and up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The issuance of additional ordinary shares or preference shares in connection with an initial business combination:
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| may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;
could cause a change in control if a substantial number of ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors;
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; 14 may adversely affect prevailing market prices for our units, ordinary shares and/or warrants; and may not result in adjustment to the exercise price of our warrants. |
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Similarly, if we issue debt securities or otherwise incur significant debt, it could result in:
default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes; limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy. |
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We expect to continue to incur significant costs in the pursuit of our initial business combination plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
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Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities for the period from July 15, 2021 (inception) through Septemberthree and six months ended June 30, 20212023 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and, after the Initial Public Offering, identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We will generate non-operating income in the form of interest income on cash and cash equivalents held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after the closing of our initial public offering.
For the periodthree months ended June 30, 2023, we had net income of $2,566,601, which resulted entirely from July 15, 2021 (inception) through Septemberearnings on investments held in Trust Account of 2,867,725, offset by formation and operating costs of $301,124.
For the six months ended June 30, 2021,2023, we had net income of $4,561,715, which resulted entirely from earnings on investments held in Trust Account of $5,395,450, offset by formation and operating costs of $833,735.
For the three months ended June 30, 2022, we had net income of $15,451, which resulted entirely from earnings on investments held in Trust Account of $297,906, offset by formation and operating costs of $282,455.
For the six months ended June 30, 2022, we had a net loss of $16,505,$415,026, which resulted entirely from formation and operating costs.costs of $656,827, offset by earnings on investments held in Trust Account of $241,801.
Liquidity and Capital Resources
Our liquidity needs have been satisfied prior to the completion of our initial public offeringIPO had been satisfied through receipt of $25,000 from the sale of the founder shares to our sponsor and up to $300,000 in loans from our sponsor under an unsecured promissory note. As of September 30,
On December 6, 2021, we had borrowed $121,525 underconsummated our IPO of 23,000,000 Units including the promissory noteissuance of 3,000,000 Units as a result of the underwriter’s exercise of its over-allotment option. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $230,000,000.
Substantially concurrently with our sponsor. the closing of the IPO, we completed the private sale of 11,200,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant, to the sponsor, generating gross proceeds of $11,200,000.
The net proceeds from (1) the sale of the units in our initial public offering, after deducting offering expenses of approximately $750,000$602,780 and underwriting commissions of $4,600,000, since the underwriter’s over-allotment option was exercised in full, and (2) the sale of the private placement warrants for a purchase price of $11,200,000 in the aggregate will be $235,850,000were $235,997,220 in the aggregate. Of this amount, $234,600,000, including $8,050,000 in deferred underwriting commissions, will bewas deposited into the trust account.Trust Account. The funds in the trust account will beTrust Account are invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. The remaining $1,250,000 will not be held in the trust account. In the event that our offering expenses exceed our estimate of $750,000 we may fund such excess with funds not to be held in the trust account. In such case, the amount of funds we intend to be held outside the trust account would decrease by a corresponding amount. Conversely, in the event that the offering expenses are less than our estimate of $750,000, the amount of funds we intend to be held outside the trust account would increase by a corresponding amount.
We intend to use substantially all of the funds held in the trust account,Trust Account, including any amounts representing interest earned on the trust accountTrust Account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account.Trust Account. We expect the interest earned on the amount in the trust accountTrust Account will be sufficient to pay our taxes. We expect the only taxes payable by us out of the funds in the trust accountTrust Account will be income and franchise taxes, if any. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust accountTrust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completionAs of June 30, 2023, we had cash outside our initial business combination, we will have available to us $1,250,000Trust Account of proceeds held outside the trust account. We will use these funds primarily to identify$24,603 and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locationshad a working capital deficiency of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
$918,740. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligatedagreed to loan us funds of up to $2,500,000 as may be required.required (the “Working Capital Loans”), of which $1,664,007 remains available as of June 30, 2023. If we complete our initial business combination, we may repay such loaned amountsWorking Capital Loans out of the proceeds of the trust account released to us. Otherwise, such loansWorking Capital Loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,500,000 of such loansthe Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be
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identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.
We expect our primary liquidity requirements during that period to include approximately $300,000 for legal, accounting, due diligence, travel and other expenses in connection with any business combinations; $150,000 for legal and accounting fees related to regulatory reporting requirements; $450,000 per year for directors and officers insurance premiums; $58,000 for Nasdaq continued listing fees; $210,000 for office space, administrative and support services; and $82,000 for general working capital that will be used for miscellaneous expenses and reserves net of estimated interest income.
These amounts are estimates and may differ materially from our actual expenses. 15
In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop”“no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop”“no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
We doThe Company uses funds held outside of the Trust Account and borrowings under the Working Capital Loans to pay 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 a Business Combination. The Company believes that the funds available may not believe we will need to raise additional funds following our initial public offering in orderbe sufficient to meet the expenditures required for operating our business. However, if our estimatesbusiness through a period of one year from the costsdate of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, wethese condensed financial statements.
We may need to obtain additional financing either to complete ouran initial business combination or because we become obligated to redeem a significant number of our public sharesPublic Shares upon completion of ouran initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.
There is no assurance that management would be able to secure these additional funds. As indicated ina result, the accompanying financial statements, at September 30, 2021, we had $25,000 in prepaid expenses and deferred offering costs of $421,440. Further, we expect to continue to incur significant costs inCompany’s management has determined that the pursuit of our acquisition plans. We cannot assure you that our plans to complete our initial business combination will be successful. These factors, among others,current liquidity conditions raise substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Contractual Obligations
Promissory Notes - Related Party
On July 22, 2021, the Sponsor agreed to loan us an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory note (the “Note”). This loan is non-interest bearing, unsecured and due at the earlier of December 31, 2021, or the completion of the Proposed Public Offering. The loan will be repaid upon the closing of our initial public offering out of the $750,000 of offering proceeds that has been allocated to the payment of offering expenses. As of September 30, 2021, we had borrowed $121,525 under the Note.
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Related Party Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligatedsponsor agreed to loan us funds as may be required (“Working Capital Loans”)., up to $2,500,000. If we complete a Business Combination, we will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid uponare due at the earlier of September 6, 2023 and the date of consummation of a Business Combination or, at the lender’s discretion, up to $2,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of SeptemberJune 30, 2021,2023, we had no borrowings of $835,993 under the Working Capital Loans.
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, (and any shares of Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will beare entitled to registration rights pursuant to a registration rights agreement to be signed prior to the consummation of the Proposed Public Offering.entered into on December 1, 2021. These holders will be entitled to certain demand and “piggyback” registration rights. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriters will be entitled to an underwriting discount of $0.20 per unit, or $4,000,000 in the aggregate (or $4,600,000 in the aggregate if the underwriters’ over-allotment option is exercised in full), payable upon theUpon closing of the Proposed Public Offering.IPO, we paid $4,600,000 to the underwriters for underwriting discounts and commissions. Additionally, the underwriters will beare entitled to a deferred underwriting discount of $0.35 per unit, or $7,000,000 in the aggregate (or approximately $8,050,000 in the aggregate if the underwriters’ over-allotment option is exercised in full). The deferred feewhich will becomebe payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
The Company will grant the underwriters a 45-day option from the date of the final prospectus relating to the Proposed Public Offering to purchase up to 3,000,000 additional Class A ordinary shares to cover over-allotments, if any, at the Proposed Public Offering price, less underwriting discounts, and commissions.
Critical Accounting PoliciesEstimates
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements,, and income and expenses during the periods reported. reported. Actual results could materially differ from those estimates.estimates. There were no critical accounting estimates. We have identified the following critical accounting policies:policies:
Net LossIncome (Loss) Per Ordinary Share
Net loss per share is computed by dividing net loss by the weighted average numberSee Note 2, Summary of ordinary sharesSignificant Accounting Policies, for the
outstanding during the period. Weighted average shares were reducedeffectCompany’s accounting and disclosures of an aggregate of 750,000 ordinary shares that were subject to forfeiture if the over-allotment option was not exercised by the underwriters. As of September 30, 2021, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.
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ASC Topic 260, “Earnings Per Share.”
Recent Accounting Standards
The Company’s management does not believe that any recently issued accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for nonemerging growth companies. As a result, the condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (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 condensed 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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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item. As of September 30, 2021, we were not subject to any market or interest rate risk. The net proceeds of the Initial Public Offering, including amounts in the Trust Account, will be invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosureDisclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2021, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer has concluded that during the period covered by this report, our disclosureare controls and other procedures were effective. Disclosure controls and proceduresthat are designed to ensure that information required to be disclosed by us in our reports filed or submitted under the Exchange Act, reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive officerChief Executive Officer and principal financial officer or persons performing similar functions, as appropriateChief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.
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 SeptemberJune 30, 20212023 covered by this Quarterly Report on Form 10-Q 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 1. LEGAL PROCEEDINGS
None.We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.
ITEM 1A. RISK FACTORS
As a smaller reporting company, we are not requiredof the date of this Quarterly Report on Form 10-Q, there have been no material changes to make disclosures under this Item. We have provided a comprehensive list ofthe risk factors disclosed in the final prospectus for our Initial Public Offering asAnnual Report on Form 10-K filed with the SEC on December 1, 2021.March 31, 2023, except as described below. Any of those risk 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 factors or disclose additional factors from time to time in our future filings with the SEC.
Nasdaq has delisted our public warrants and may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We cannot assure you that our securities will continue to be listed on Nasdaq. In order to continue listing our securities on Nasdaq prior to our initial Business Combination, we must maintain certain financial, distribution and share price levels. In general, we must maintain a minimum amount in shareholders’ equity and a minimum of 300 round lot holders for our ordinary shares. On June 24, 2023, we received a written notice from the Listing Qualifications Department of Nasdaq indicating that we are not in compliance with Listing Rule 5452(b)(B), which requires the public warrants to be held by at least 100 holders in order to continue the listing of the public warrants on the Nasdaq Global Market. Accordingly, the Company’s warrants were suspended from the Nasdaq Global Market on August 2, 2023, and a Form 25-NSE was filed with the Securities and Exchange Commission (the “SEC”), which removed the Company’s warrants from listing and registration on Nasdaq.
If any of our securities are delisted from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
a limited availability of market quotations for our securities;
reduced liquidity for our securities;
a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
a limited amount of news and analyst coverage; and
a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-empts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our Units, Class A ordinary shares and warrants currently qualify as covered securities under such statute. Although the states are pre-empted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by blank check companies, other than the State of Idaho, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities, including in connection with our initial Business Combination, which may negatively impact our ability to consummate our initial Business Combination.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On July 22,December 6, 2021, UTA Acquisition Sponsorthe Company consummated its initial public offering of 23,000,000 units at $10.00 per unit, generating gross proceeds of $230,000,000. Credit Suisse Securities (USA) LLC ouracted as the sole book-running manager and underwriter of the offering. The securities sold in the initial public offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-260967). The SEC declared the registration statement effective on December 1, 2021.
Our sponsor subscribed for an aggregate of 7,187,500 Class Bpurchased 11,200,000 private placement warrants, each exercisable to purchase one ordinary shares, for an aggregate offeringshare at $11.50 per share, at a price of $25,000. $1.00 per warrant ($11,200,000 in the aggregate), in a private placement that closed substantially concurrently with the closing of our initial public offering.
In November 2021, our sponsor surrendered an aggregate of 1,437,500 Class B ordinary shares for no consideration, thereby reducingconnection with the aggregate number of founder shares outstanding to 5,750,000, resulting in an effective purchase price paid for the founder sharesinitial public offering, we incurred offering costs of approximately $0.004 per share. Such securities were issued in connection with our incorporation pursuant$13,252,780 (including deferred underwriting commissions of approximately $8,050,000). Other incurred offering costs consisted principally of preparation fees related to the exemption from registration contained in Section 4(a)(2)initial public offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the Securities Act. Our sponsorinitial business combination, if consummated) and the initial public offering expenses, $234,600,000, of the net proceeds from our initial public offering and certain of the proceeds from the private placement of the private placement warrants (or $10.00 per unit sold in the initial public offering) was placed in the trust account.
There has been no material change in the planned use of the proceeds from the initial public offering and private placement as is an accredited investor for purposesdescribed in the Company’s final prospectus related to the initial public offering. For a description of Rule 501the use of Regulation D. No underwriting discounts or commissions were paid with respect to such sales.the proceeds generated from the initial public offering, see Part I, Item 2 of this Form 10-Q.
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Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(a). None.
9(b). None.
(c). During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each such term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit Number | Description | ||
31.1* | |||
31.2* | |||
32.1* * | |||
32.2* * | |||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
| Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith. |
10
** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UTA Acquisition Corporation | ||||||
Date: |
| By: | /s/ Clinton Foy | |||
Clinton Foy | ||||||
Co-Chief Executive Officer |
| ||||||
Date: August 21, 2023 | ||||||
|
| By: | /s/ Chris Jefferis | |||
Chris Jefferis | ||||||
Chief Financial Officer |
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