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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended JuneSeptember 30, 2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from __________ to __________
Commission
file number: 001-40706
Blue Whale Acquisition Corp I
(Exact
name of registrant as specified in its charter)
Cayman Islands |
|
98-1590107 |
(State
or other jurisdiction of
incorporation
or organization) |
|
(I.R.S.
Employer
Identification Number) |
|
|
|
PO Box 1093, Boundary Hall
Cricket Square, Grand Cayman
Cayman Islands |
|
KY1-1102 |
(Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: +1 (345) 949-8066
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 (“Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer |
☐ |
Accelerated
filer |
☐ |
Non-accelerated filer |
☒ |
Smaller
reporting company |
☒ |
|
|
Emerging
growth company |
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No
☐
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title
of Each Class: |
|
Trading
Symbol(s) |
|
Name
of Each Exchange on Which Registered: |
Units,
each consisting of one share of Class A common stock, $0.0001 par value, and one-fourth of one redeemable warrant |
|
BWCAU |
|
The
Nasdaq Stock Market LLC |
Shares
of Class A common stock included as part of the units |
|
BWC |
|
The
Nasdaq Stock Market LLC |
Redeemable
warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price
of $11.50 |
|
BWCAW |
|
The
Nasdaq Stock Market LLC |
Securities
registered pursuant to Section 12(g) of the Exchange Act: None
As
of August 12November 14, 2022, there were 22,940,811 shares of the Registrant’s Class A common stock, par value $0.0001 per share,
2,548,979
shares of the Registrant’s Class F common stock, par value $0.0001 per share, and 5,097,958 shares of the Registrant’s
Class G common stock, par value $0.0001 per share issued and outstanding.
BLUE
WHALE ACQUISITION CORP I
Quarterly
Report on Form 10-Q
Table
of Contents
|
|
|
Page No. |
PART I. FINANCIAL INFORMATION |
|
|
Item 1. |
Financial Statements |
|
1 |
|
Condensed Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021 |
|
1 |
|
Condensed Statements of Operations for the three and nine months ended September 30, 2022 and for the three months ended September 30, 2021 and the period from March 10, 2021 (inception) through September 30, 2021 (Unaudited) |
|
2 |
|
Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the three and nine months ended September 30, 2022, for the three months ended September 30, 2021 and for the period from March 10, 2021 (inception) through September 30, 2021 (Unaudited) |
|
3 |
|
Condensed Statements of Cash Flows for the nine months ended September 30, 2022 and for the period from March 10, 2021 (inception) through September 30, 2021 (Unaudited) |
|
4 |
|
Notes to Condensed Financial Statements (Unaudited) |
|
5 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
20 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
|
25 |
Item 4. |
Controls and Procedures |
|
25 |
|
|
|
|
PART II. OTHER INFORMATION |
|
|
Item 1. |
Legal Proceedings |
|
26 |
Item 1A. |
Risk Factors |
|
26 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities |
|
26 |
Item 3. |
Defaults Upon Senior Securities |
|
27 |
Item 4. |
Mine Safety Disclosures |
|
27 |
Item 5. |
Other Information |
|
27 |
Item 6. |
Exhibits |
|
28 |
Item 1.
Financial Statements
BLUE
WHALE ACQUISITION CORP I
CONDENSED
BALANCE SHEETS
| |
| | | |
| | |
| |
September 30,
2022 | | |
December 31,
2021 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
Current Assets | |
| | | |
| | |
Cash | |
$ | 2,131,424 | | |
$ | 66,156 | |
Prepaid expenses - current | |
| 659,168 | | |
| 801,822 | |
Total Current Assets | |
| 2,790,592 | | |
| 867,978 | |
Forward purchase agreement | |
| - | | |
| 150,000 | |
Prepaid expenses - non-current | |
| - | | |
| 455,000 | |
Cash held in Trust Account | |
| 229,408,110 | | |
| 229,408,110 | |
TOTAL ASSETS | |
$ | 232,198,702 | | |
$ | 230,881,088 | |
| |
| | | |
| | |
LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accrued expenses | |
$ | 1,242,604 | | |
$ | 966,011 | |
Promissory note – related party | |
| 156,384 | | |
| 156,384 | |
Accounts payable - related party | |
| 325,000 | | |
| 325,000 | |
Total Current Liabilities | |
| 1,723,988 | | |
| 1,447,395 | |
Convertible note - related party | |
| 2,500,000 | | |
| - | |
Warrant liability | |
| 1,896,150 | | |
| 7,674,891 | |
Deferred underwriting fee payable | |
| 8,029,284 | | |
| 8,029,284 | |
Total Liabilities | |
| 14,149,422 | | |
| 17,151,570 | |
Commitments and Contingencies (Note 6) | |
| | | |
| | |
Class A ordinary shares subject to possible redemption $0.0001 par value, 22,940,811 shares at redemption value at September 30, 2022 and December 31, 2021, respectively | |
| 229,408,110 | | |
| 229,408,110 | |
Shareholders’ Deficit | |
| | | |
| | |
Preference Shares, $0.0001 par value; 5,000,000 shares authorized, none outstanding | |
| - | | |
| - | |
Class A ordinary shares, $0.0001 par value, 500,000,000 shares authorized, none-issued and outstanding (excluding 22,940,811 shares subject to redemption) at September 30, 2022 and December 31, 2021, respectively | |
| - | | |
| - | |
Class F ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 2,548,979 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | |
| 255 | | |
| 255 | |
Class G ordinary shares, $0.0001 par value; 30,000,000 shares authorized; 5,097,958 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | |
| 509 | | |
| 509 | |
Additional paid-in capital | |
| - | | |
| - | |
Accumulated deficit | |
| (11,359,594 | ) | |
| (15,679,356 | ) |
Total Shareholders’ Deficit | |
| (11,358,830 | ) | |
| (15,678,592 | ) |
TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFCIT | |
$ | 232,198,702 | | |
$ | 230,881,088 | |
The
accompanying notes are an integral part of these unaudited condensed financial statements.
BLUE
WHALE ACQUISITION CORP I
CONDENSED
STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
| | | |
| | | |
| | | |
| | |
| |
For the
three months ended September 30,
2022 | | |
For the
three months ended September 30,
2021 | | |
For the
nine months ended
September 30,
2022 | | |
For the
period from
March 10, 2021
(inception) through September 30,
2021 | |
Formation costs and other operating expenses | |
$ | 368,776 | | |
$ | 337,701 | | |
$ | 1,308,979 | | |
$ | 342,701 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (368,776 | ) | |
| (337,701 | ) | |
| (1,308,979 | ) | |
| (342,701 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other Income (expense): | |
| | | |
| | | |
| | | |
| | |
Unrealized gain on marketable securities held in Trust Account | |
| - | | |
| 5,000 | | |
| - | | |
| 5,000 | |
Transaction costs allocable to warrant liability | |
| - | | |
| (342,640 | ) | |
| - | | |
| (342,640 | ) |
Change in fair value of warrant liability | |
| 902,928 | | |
| 1,492,935 | | |
| 5,778,741 | | |
| 1,492,935 | |
Change in fair value of forward purchase agreement | |
| - | | |
| 200,000 | | |
| (150,000 | ) | |
| 200,000 | |
| |
| | | |
| | | |
| | | |
| | |
Net income | |
$ | 534,152 | | |
$ | 1,017,594 | | |
$ | 4,319,762 | | |
$ | 1,012,594 | |
Weighted average shares outstanding of Class A redeemable ordinary shares | |
| 22,940,811 | | |
| 13,542,159 | | |
| 22,940,811 | | |
| 6,040,865 | |
Basic and diluted net income per share, Class A ordinary shares | |
$ | 0.02 | | |
$ | 0.06 | | |
$ | 0.17 | | |
$ | 0.12 | |
Weighted average shares outstanding, Class F ordinary shares non-redeemable shares | |
| 2,548,979 | | |
| 2,383,805 | | |
| 2,548,979 | | |
| 2,294,301 | |
Basic and diluted net income per share, Class F ordinary shares, non-redeemable shares | |
$ | 0.02 | | |
$ | 0.06 | | |
$ | 0.17 | | |
$ | 0.12 | |
The
accompanying notes are an integral part of these unaudited condensed financial statements.
BLUE
WHALE ACQUISITION CORP I
CONDENSED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND SIXNINE MONTHS ENDED JUNE SEPTEMBER 30, 2022, FOR THE THREE MONTHS
ENDED
JUNESEPTEMBER 30, 2021 AND FOR THE PERIOD FROM MARCH 10,
2021
(INCEPTION) THROUGH JUNE SEPTEMBER 30, 2021
(UNAUDITED)
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
Class F
Ordinary Shares | | |
Class G
Ordinary Shares | | |
Additional Paid in | | |
Accumulated | | |
Total
Shareholders’
Equity | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
(Deficit) | |
Balance – March 10, 2021 (inception) | |
| - | | |
$ | - | | |
| - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (5,000 | ) | |
| (5,000 | ) |
Balance – March 31, 2021 | |
| 2,222,222 | | |
| 222 | | |
| 4,444,445 | | |
| 444 | | |
| 24,334 | | |
| (5,000 | ) | |
| 20,000 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Balance – June 30, 2021 | |
| 2,222,222 | | |
| 222 | | |
| 4,444,445 | | |
| 444 | | |
| 24,334 | | |
| (5,000 | ) | |
| 20,000 | |
Partial exercise of the underwriters’ over-allotment option | |
| 326,757 | | |
| 33 | | |
| 653,513 | | |
| 65 | | |
| - | | |
| - | | |
| - | |
Class A ordinary shares accretion to redemption value | |
| - | | |
| - | | |
| - | | |
| - | | |
| (24,334 | ) | |
| (15,801,589 | ) | |
| (15,825,923 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,017,594 | | |
| 1,017,594 | |
Balance – September 30, 2021 | |
| 2,548,979 | | |
$ | 255 | | |
| 5,097,958 | | |
$ | 509 | | |
$ | - | | |
$ | (14,788,995 | ) | |
$ | (14,788,231 | ) |
| |
Class F
Ordinary Shares | | |
Class G
Ordinary Shares | | |
Additional Paid in | | |
Accumulated | | |
Total
Shareholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance – January 1, 2022 | |
| 2,548,979 | | |
$ | 255 | | |
| 5,097,958 | | |
$ | 509 | | |
$ | - | | |
$ | (15,679,356 | ) | |
$ | (15,678,592 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,450,292 | | |
| 2,450,292 | |
Balance – March 31, 2022 | |
| 2,548,979 | | |
| 255 | | |
| 5,097,958 | | |
| 509 | | |
| - | | |
| (13,229,064 | ) | |
| (13,228,300 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,335,318 | | |
| 1,335,318 | |
Balance – June 30, 2022 | |
| 2,548,979 | | |
| 255 | | |
| 5,097,958 | | |
| 509 | | |
| - | | |
| (11,893,746 | ) | |
| (11,892,982 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 534,152 | | |
| 534,152 | |
Balance – September 30, 2022 | |
| 2,548,979 | | |
$ | 255 | | |
| 5,097,958 | | |
$ | 509 | | |
$ | - | | |
$ | (11,359,594 | ) | |
$ | (11,358,830 | ) |
The
accompanying notes are an integral part of these unaudited condensed financial statements.
BLUE
WHALE ACQUISITION CORP I
CONDENSED
STATEMENTS OF CASH FLOWS
FOR
THE SIXNINE MONTHS ENDED JUNE SEPTEMBER 30, 2022 AND FOR THE PERIOD
FROM MARCH 10, 2021
(INCEPTION) THROUGH JUNE SEPTEMBER 30, 2021
(UNAUDITED)
| |
| | | |
| | |
| |
For the
nine months ended
September 30,
2022 | | |
For the
period from
March 10, 2021
(Inception) through
September 30,
2021 | |
Cash flow from Operating Activities: | |
| | | |
| | |
| |
| | | |
| | |
Net income | |
$ | 4,319,761 | | |
$ | 1,012,594 | |
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| | |
Unrealized gains earned on marketable securities held in Trust Account | |
| - | | |
| (5,000 | ) |
Change in fair value of warrant liability | |
| (5,778,741 | ) | |
| (1,492,935 | ) |
Transaction costs allocated to warrant liability | |
| - | | |
| 342,640 | |
Change in fair value of forward purchase agreement | |
| 150,000 | | |
| (200,000 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 597,655 | | |
| (1,423,250 | ) |
Accrued expenses | |
| 276,593 | | |
| 138,739 | |
Accounts payable - related party | |
| - | | |
| - | |
Net cash used in operating activities | |
$ | (434,732 | ) | |
$ | (1,627,212 | ) |
| |
| | | |
| | |
Cash flows from Investing Activities: | |
| | | |
| | |
Investment of cash into Trust Account | |
| - | | |
| (229,408,110 | ) |
Net cash used in investing activities | |
$ | - | | |
$ | (229,408,110 | ) |
| |
| | | |
| | |
Cash flows from Financing Activities: | |
| | | |
| | |
Proceeds from sale of Class A ordinary shares; net of underwriting discounts paid | |
| - | | |
| 225,408,110 | |
Proceeds from sale of Private Placement Warrants | |
| - | | |
| 6,000,000 | |
Proceeds from promissory note | |
| - | | |
| 156,384 | |
Payment of offering costs | |
| - | | |
| (156,384 | ) |
Proceeds from convertible note - related party | |
| 2,500,000 | | |
| - | |
Net cash provided by financing activities | |
$ | 2,500,000 | | |
$ | 231,408,110 | |
| |
| | | |
| | |
Net change in cash | |
| 2,065,268 | | |
| 372,788 | |
Cash - Beginning of period | |
| 66,156 | | |
| - | |
Cash - End of Period | |
$ | 2,131,424 | | |
$ | 372,788 | |
| |
| | | |
| | |
Non-cash investing and financing activities: | |
| | | |
| | |
Offering costs included in accrued offering costs | |
$ | - | | |
$ | 698,630 | |
Payment of accrued expense through promissory note | |
$ | - | | |
$ | 325,000 | |
Payment of prepaid expenses through promissory note | |
$ | - | | |
$ | (40,500 | ) |
Deferred underwriting fee payable | |
$ | - | | |
$ | 8,029,284 | |
Initial measurement of warrants issued in connection with the initial public offering accounted for as liabilities | |
$ | - | | |
$ | 8,874,667 | |
Initial measurement of forward purchase agreement units issued in connection with the initial public offering accounted for as liabilities | |
$ | - | | |
$ | 100,000 | |
The
accompanying notes are an integral part of these unaudited condensed financial statements.
BLUE
WHALE ACQUISITION CORP I
NOTES
TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE
1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Blue
Whale Acquisition Corp I (the “Company”) is a blank check company incorporated in the Cayman Islands on March 10, 2021.
The Company was formed for the purpose of effectuating a merger, capital share exchange, asset acquisition, share purchase, reorganization
or other similar business combination with one or more businesses (the “Business Combination”). The Company is an early stage
and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth
companies.
As
of JuneSeptember 30, 2022, the Company had not yet commenced any operations. All activity for the period March 10, 2021 (inception)
through JuneSeptember 30, 2022 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”)
and identifying a target for a Business Combination. The Company will not generate any operating revenues until after the completion
of its initial Business Combination, at the earliest.
The
registration statement for the Company’s Initial Public Offering was declared effective on August 3, 2021. On August 6,
2021, the Company consummated the Initial Public Offering of 20,000,000 units (“Units” and, with respect to Class
A common shares included in the Units offered, the “Public Shares”), generating gross proceeds of $200,000,000, which is
described in Note 3. Simultaneously with the Initial Public Offering, the Company’s Sponsor, Blue Whale Sponsor I LLC, purchased
an aggregate of 3,000,000 Private Placement Warrants at a price of $2.00 per warrant for an aggregate purchase price of
$6,000,000.
On
August 16, 2021, Goldman Sachs & Co. LLC and BofA Securities (the “underwriters”) partially exercised the over-allotment
option granted to them by the Company and purchased an additional 2,940,811 Units, generating aggregate gross proceeds of $29,408,110,
received $588,162 in underwriting fees, and forfeited the remainder of the over-allotment option. The over-allotment option closed
on August 18, 2021. Simultaneously with the closing of the over-allotment option, the Company completed the private placement of
an aggregate of Private Placement Warrants to the Sponsor at a purchase price of $ per Private Warrant, generating
gross proceeds of $.
Following
the closing of the Initial Public Offering on August 6, 2021, an amount of $200,000,000 ($10.00 per Unit) from the net
proceeds of the sale of the Units in the Initial Public Offering was placed in a trust account (“Trust Account”).
Transaction
costs amounted to $13,781,962, consisting of $4,588,162 of underwriting fees, $8,029,284 of deferred underwriting fees (see
Note 6) and $1,164,516 of other costs. In addition, $2,281,197 of cash was held outside of the Trust Account and is available
for working capital purposes.
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. Nasdaq rules provide that the Business Combination must be with one or more target businesses that
together have a fair market value equal to at least 80% % of the balance in the Trust Account (as defined below) (less any deferred
underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement
to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns
or acquires 50% % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended
(the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.
Upon the closing of the Initial Public Offering, management has agreed that $10.00 per Unit sold in the Initial Public Offering,
including the proceeds from the sale of the Private Placement Warrants, will be held in a trust account (the “Trust Account”)
and may or may not be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment
Company Act, with a maturity of
185 days or less, or in any open-ended investment company that holds itself out as a money
market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of:
(i) the consummation of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s shareholders,
as described below.
The
Company will provide its holders of the outstanding Public Shares (the “public shareholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the
Company may seek shareholder approval of a Business Combination at a meeting called for such purpose at which shareholders may seek to
redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business
Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation
of a Business Combination and, if the Company seeks shareholder approval, a majority of the outstanding shares voted are voted in favor
of the Business Combination.
Notwithstanding
the foregoing, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the
tender offer rules, the Company’s Certificate of Incorporation provides that, a public shareholder, together with any affiliate
of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under
Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking
redemption rights with respect to 15% 15% or more of the Public Shares without the Company’s prior written consent.
The
public shareholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially
$10.00 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company
to pay its tax obligations). The per-share amount to be distributed to shareholders who redeem their shares will not be reduced by the
deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 7). There will be no redemption rights
upon the completion of a Business Combination with respect to the Company’s warrants. These shares of Class A ordinary shares are
recorded at a redemption value and classified as temporary equity after the completion of the Initial Public Offering, in accordance
with Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”.
If
a shareholder vote is not required and the Company does not decide to hold a shareholder vote for business or other legal reasons, the
Company will, pursuant to its Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities
and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would
be included in a proxy statement with the SEC prior to completing a Business Combination.
The
Company’s Sponsor has agreed (a) to vote its Founder Shares (as defined in Note 5) and any Public Shares purchased during or after
the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Certificate of
Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination
unless the Company provides dissenting public shareholders with the opportunity to redeem their Public Shares in conjunction with any
such amendment; (c) not to redeem any shares (including the Founder Shares) into the right to receive cash from the Trust Account in
connection with a shareholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business
Combination if the Company does not seek shareholder approval in connection therewith) or a vote to amend the provisions of the Amended
and Restated Certificate of Incorporation relating to shareholders’ rights of pre-Business Combination activity; and (d) that the
Founder Shares shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However,
the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or
after the Initial Public Offering if the Company fails to complete its Business Combination.
The
Company will have until August 6, 2023 to consummate a Business Combination (the “Combination Period”). If the Company
is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering (the “Combination
Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but no 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 earned on the funds held in the Trust Account and not previously released
to us to pay taxes (less 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 shareholder’s rights as shareholders (including the right to receive further
liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption,
subject to the approval of the remaining shareholders and the Company’s board of directors, proceed to commence a voluntary liquidation
and thereby a formal dissolution of the Company, subject in each case to its obligations under Cayman Islands law to provide for claims
of creditors and the requirements of applicable law. The underwriters have agreed to waive their rights to the deferred underwriting
commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period,
and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption
of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for
distribution will be less than the Initial Public Offering price per Unit $10.00.
The
Sponsor has agreed to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Private
Placement Shares it will receive if the Company fails to complete a Business Combination within the Combination Period. However, if the
Sponsor or any of its respective affiliates acquire Public Shares, such Public Shares will be entitled to liquidating distributions from
the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed
to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company does
not complete a Business Combination within the Combination Period, and in such event, such amounts will be included with the other funds
held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is
possible that the per share value of the assets remaining available for distribution will be less than the Proposed Public Offering price
per share ($10.00).
In
order to protect the amounts held in the Trust Account, the Sponsor has agreed that it will be liable to the Company if and to the extent
any claims by a third-party for services rendered or products sold to the Company, or a prospective target business with which the Company
has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount
of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in
the Trust Account as of the day of liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value
of the trust assets, less taxes payable; provided that such liability will not apply to any claims by a third-party or prospective target
business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable)
nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked
the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient
funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore,
the Company cannot assure its shareholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers
or directors will indemnify the Company for claims by third-parties including, without limitation, claims by vendors and prospective
target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims
of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company
does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the
Trust Account.
Risks
and Uncertainties
In
February 2022, the Russian Federation and Belarus commenced military operations in Ukraine. As a result of this action, various
nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. The impact of this
action and related sanctions on the global economy are not determinable as of the date of these financial statements and the specific
impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these
financial statements.
Management
is currently evaluating the impact of the COVID-19 pandemic on the industries in which a Business Combination target is sought and has
preliminarily concluded that, while it is reasonably possible that the COVID-19 pandemic could have a negative effect on the Company’s
financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as
of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
unaudited condensed financial statements included herein have been prepared in accordance with accounting principles generally accepted
in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations
of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements
prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. The information furnished
in the condensed financial statements include all adjustments (consisting of only normal, recurring adjustments), considered necessary
to present fairly the results of operations, financial position and cash flows of the Company. These financial statements should be read
in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The operating results
for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.
Liquidity,
Capital Resources and Going Concern
As
of JuneSeptember 30, 2022 and December 31, 2021, the Company held $229,408,110
of cash in the Trust Account; in addition,
the Company held cash outside of the Trust Account of $2,281131,197424
and $66,156, respectively. Prior to the completion of the Initial
Public Offering, the Company’s liquidity needs had been satisfied through the payment of certain offering costs of $25,000
from
the Sponsor for the Founder Shares, and an unsecured promissory note from the Sponsor of $300,000
(see Note 5). The Company’s
Sponsor has undertaken to fund working capital deficiencies of the Company and finance transaction costs in connection with an initial
Business Combination of the Company by means of Company working capital loans, as defined below (see Note 5). On February 22, 2022,
the Company received cash proceeds of $ million from a draw under the Working Capital Loan arrangement with the Sponsor.
In
connection with the Company'’s assessment of going concern considerations in accordance with the authoritative guidance in Financial
Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties
about an Entity'’s Ability to Continue as a Going Concern.” The Company has until August 6, 2023, 24 months from the closing
of the IPO, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination
by the specified period. If a Business Combination is not consummated by August 6, 2023 and the Company decides not to extend the period
of time to consummate a Business Combination, there will be a mandatory liquidation and subsequent dissolution.
The
Company’s date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company'’s ability to
continue as a going concern one year from the date that these condensed financial statements are issued. These condensed financial statements
do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
Emerging
Growth Company
The
Company is an “Emerging Growth Company,” (“EGC”) as defined in Section 2(a) of 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 EGC’s including, but not limited to,
not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the
Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its 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.
Further,
Section 102(b)(1) of the JOBS Act exempts an EGC 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 non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended
transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company, which is neither an EGC nor an EGC
which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
Use
of Estimates
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Making
estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of
a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating
its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ
significantly from those estimates.
Cash
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company had $2,281131,197424 and $66,156 in cash and no cash equivalents as of JuneSeptember 30, 2022 and December 31,
2021, respectively.
Cash
held in Trust Account
At
JuneSeptember 30, 2022 and December 31, 2021, all of the assets held in the Trust Account were held in non-interest bearing cash
accounts.
Income
Taxes
The
Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes”, which requires an asset
and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed
for differences between the financial statements and tax bases of assets and liabilities that will result in future taxable or deductible
amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits, if any, as income tax expense. There were no no unrecognized tax benefits and no amounts accrued for interest
and penalties as of JuneSeptember 30, 2022. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position.
There
is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations,
income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.
The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next
twelve months.
Shares
Subject to Possible Redemption
The
Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”. Class A ordinary shares subject to mandatory
redemption are classified as a liability instrument and are 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 the Company’s control) are classified as temporary equity. At all other times, ordinary shares
are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered
to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at both JuneSeptember 30,
2022 and December 31, 2021, 22,940,811 Class A ordinary shares subject to possible redemption are presented as temporary
equity, outside of the shareholders’ equity section of the Company’s balance sheet.
As
of JuneSeptember 30, 2022 and December 31, 2021, the ordinary share reflected on the balance sheet are reconciled in the following
table:
Scheduled of common stock subject to possible redemption | |
| | |
Gross Proceeds | |
$ | 229,408,110 | |
Less: | |
| | |
Proceeds allocated to public warrants | |
| (6,236,666 | ) |
Class A ordinary shares issuance costs | |
| (13,396,055 | ) |
Add: | |
| | |
Accretion of carrying value to redemption value | |
| 19,632,721 | |
Class A ordinary shares subject to possible redemption | |
$ | 229,408,110 | |
Offering
Costs
Offering
costs consist of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related
to the Initial Public Offering. Offering costs amounting to $13,781,962 were charged to shareholders’ equity or operations
upon the completion of the Initial Public Offering.
Share
Based Compensation
The
transfer of the Founder Shares (see Note 5) is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC
718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant
date. The Founders Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination). Share-based
compensation would be recognized at the date a Business Combination is considered probable (i.e., upon occurrence of a Business Combination)
in an amount equal to the number of Founders Shares that ultimately vest multiplied by the grant date fair value per share (unless subsequently
modified) less the amount initially received for the purchase of the Founders Shares. As of JuneSeptember 30, 2022, the Company determined
that a Business Combination is not considered probable, and, therefore, no share-based compensation expense has been recognized.
The
fair value at the grant date of the 125,000 shares transferred to the Company’s directors was $222,780 or $1.78 per
share. Upon consummation of an initial business combination, the Company will recognize $222,780 in compensation expense. in compensation expense.
Net
Income Per Ordinary Share
Basic
income per ordinary share is computed by dividing net income (loss) applicable to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period. Consistent with ASC Topic 480, ordinary shares subject to possible redemption, as well as their
pro rata share of undistributed trust earnings consistent with the two-class method, have been excluded from the calculation of income
(loss) per ordinary share for the three and sixnine months ended JuneSeptember 30, 2022 and for three months ended JuneSeptember 30, 2021 and
the period from March 10, 2021 (inception) to JuneSeptember 30, 2021. Such shares, if redeemed, only participate in their pro rata
share of trust earnings. Diluted income per share includes the incremental number of ordinary shares to be issued to settle warrants,
as calculated using the treasury method. For the three and sixnine months ended JuneSeptember 30, 2022 and the three months ended JuneSeptember 30,
2021 and the period from March 10, 2021 (inception) to JuneSeptember 30, 2021, the Company did not have any dilutive warrants,
securities or other contracts that could potentially, be exercised or converted into ordinary shares. As a result, diluted income per
ordinary share is the same as basic income per ordinary share for all periods presented.
A
reconciliation of net income (loss) per ordinary share is as follows:
Scheduled of basic and diluted net loss per share | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
For
the Three Months ended September 30, 2022 | | |
For
the Three Months Ended September 30, 2021 | | |
For
the Nine Months ended September 30, 2022 | | |
For
the
period from March 10, 2021 (inception) through September 30, 2021 | |
| |
Class
A | | |
Class
F | | |
Class
A | | |
Class
F | | |
Class
A | | |
Class
F | | |
Class
A | | |
Class
F | |
Basic
and diluted net income per ordinary share | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Numerator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Allocation
of net income, as adjusted | |
$ | 480,736 | | |
$ | 53,416 | | |
$ | 865,280 | | |
$ | 152,314 | | |
$ | 3,887,785 | | |
$ | 431,976 | | |
$ | 733,872 | | |
$ | 278,722 | |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic
and diluted weighted average shares outstanding | |
| 22,940,811 | | |
| 2,548,979 | | |
| 13,542,159 | | |
| 2,383,805 | | |
| 22,940,811 | | |
| 2,548,979 | | |
| 6,040,865 | | |
| 2,294,301 | |
Basic
and diluted net income per ordinary share | |
$ | 0.02 | | |
$ | 0.02 | | |
$ | 0.06 | | |
$ | 0.06 | | |
$ | 0.17 | | |
$ | 0.17 | | |
$ | 0.12 | | |
$ | 0.12 | |
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal Depository Insurance Corporation coverage limit of $250,000. The Company has not experienced losses
on this account and management believes the Company is not exposed to significant risks on such account.
Fair
Value of Financial Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value
Measurement”, approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term
nature.
Derivative
Financial Instruments
The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted
for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each
reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion
of the instrument could be required within 12 months of the balance sheet date.
Recently
Issued Accounting Standards
In
August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”)
to simplify accounting for certain financial instruments. ASU 2020- 06 eliminates the current models that require separation of beneficial
conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining
to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings
per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective
for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.
The Company is currently evaluating the impact this guidance will have on its financial statements.
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
NOTE
3. INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company sold 20,000,000 Units at a purchase price of $10.00 per Unit. Each Unit will
consist of one Class A ordinary share, $0.0001 par value, and one-fourth of one redeemable warrant (“Public Warrant”).
Each whole Public Warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole
share (see Note 7).
On
August 16, 2021, the underwriters partially exercised the over-allotment option and purchased an additional 2,940,811 Over-Allotment
Units, generating an aggregate of gross proceeds of $29,408,110, received $588,162 in underwriting fees in cash, and forfeited the
remainder of the over-allotment option. The over-allotment closed on August 18, 2021.
NOTE
4. PRIVATE PLACEMENT
Simultaneously
with the initial public offering, the Sponsor purchased an aggregate of 3,000,000 Private Placement Warrants at a price of
$2.00 per warrant for an aggregate purchase price of $6,000,000. Simultaneously with the closing of the overallotment option, the
Company completed the private sale of an additional 294,081 Private Placement Warrants to the Sponsor at a purchase price of
$2.00 per Private Warrant, generating gross proceeds of $588,162.
Each
Private Placement Warrant is identical to the warrants offered in the Initial Public Offering, except there will be no redemption rights
or liquidating distributions from the trust account with respect to Private Placement Warrants, which will expire worthless if we do
not consummate a Business Combination within the Combination Period.
NOTE
5. RELATED PARTY TRANSACTIONS
Founder
Shares
On
March 11, 2021, the Company issued an aggregate of shares of Class B ordinary shares (the “Founder Shares”)
to the Sponsor for an aggregate purchase price of $. The Founder Shares include an aggregate of up to 750,000 shares
subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment is not exercised in full or in part. Such
shares have been recapitalized into 2,548,979 Class F ordinary shares and 5,097,958 Class G ordinary shares (which
we respectively refer to as “Class F founder shares” and “Class G founder shares,” and collectively refer to
as “founder shares” as further described herein). Pursuant to a re-organization of the Company’s share capital effective
July 5, 2021, the Class B ordinary shares have been canceled and all of the shares presently issued and outstanding are Class F
ordinary shares and Class G ordinary shares. (See note 8).
On
August 18, 2021, the underwriters partially exercised the over-allotment option resulting in the issuance of an additional 326,757
Class
F ordinary shares and 653,513 Class G ordinary shares to the Sponsor. On September 17, 2021, the remaining balance of
the over-allotment option expired unexercised and was therefore forfeited.
The
Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until two years after the completion of a Business Combination.
Promissory
Note - Related Party
On
March 11, 2021, the Sponsor agreed to loan the Company an aggregate of up to $ to cover expenses related to the Initial
Public Offering pursuant to a promissory note (the “Note”). The Note is non-interest bearing and is payable on the earlier
of (i) December 31, 2022 or (ii) the date the Company completes its initial Business Combination. As of JuneSeptember 30, 2022
and December 31, 2021, the Company has $ outstanding on the Note, which is classified as current on our Condensed Balance
Sheets.
Related
Party Loans
In
order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor,
or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working
Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. On February 16, 2022, the Sponsor confirmed
to the Company that it will provide any such Working Capital Loans for at least the next twelve months, pursuant to a promissory note.
The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion,
up to $2,500,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $2.00 per
warrant. The warrants will be identical to the Private Placement Warrants. 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.
On
February 16, 2022, the Company entered into a promissory note with the Sponsor pursuant to which the Sponsor agreed to loan the
Company up to an aggregate principal amount of $2,500,000 which the Company drew down in full on February 22, 2022. This note
is non-interest bearing and is due on the earlier of the day by which the Company must complete a Business Combination, and the effective
date of a Business Combination. The outstanding balance under this loan amounted to $2,500,000 as of JuneSeptember 30, 2022. Management
determined that there was an embedded conversion feature related to the note that would require bifurcation and be classified as a liability.
However, based on a third-party valuation, the amount was determined to be de minimis and therefore the Company did not record a conversion
option liability in the financial statements as of JuneSeptember 30, 2022.
In
addition, our Sponsor, officers and directors, or our respective affiliates will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, executive
officers or directors, or our affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside
the Trust Account. There was $325,000 due to related party on JuneSeptember 30, 2022 and December 31, 2021.
Administrative
Support Agreement
The
Company entered into an agreement whereby, commencing on August 6, 2021, and continuing until the earlier of the consummation of
a Business Combination or the Company’s liquidation, the Company may reimburse an affiliate of the Sponsor up to an amount of $
per month for office space and secretarial and administrative support.
per
month for office space and secretarial and administrative support. The Company had expensed $30,000 and $90,000 for the three and nine months ended September 30, 2022, respectively, and $20,000 for the three and nine months ended September 30, 2021. The Company had accrued $140,000 and $50,000 of these fees as of each September 30, 2022 and December 31, 2021, respectively, which are presented within accrued expenses on the condensed balance sheets.
NOTE
6. COMMITMENTS AND CONTINGENCIES
Registration
Rights
The
holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital
Loans (and in each case holders of their component securities, as applicable) will be entitled to registration rights pursuant to a registration
rights agreement to be signed prior to or on the effective date of the Initial Public Offering, requiring the Company to register such
securities for resale (in the case of the Founder Shares, only after conversion to our Class A ordinary shares). The holders of the majority
of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415
under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
Pursuant
to the Underwriting Agreement, the underwriters were paid a cash underwriting discount of 2.00% % of the gross proceeds of the
Initial Public Offering, or $4,488,162. In addition, the underwriters will be entitled to a deferred fee of three and half percent (3.50%)
of the gross proceeds of the Initial Public Offering, or $8,029,284. On August 16, 2021, the Underwriters partially exercised the
over-allotment option and purchased an additional 2,940,811 Over-Allotment Units, generating an aggregate of gross proceeds
of $29,408,110, incurred $588,162 in cash underwriting fees and $1,029,284 in deferred underwriters’ fees, and forfeited
the remainder of the option, which over-allotment closed on August 18, 2021. The deferred fee was placed in the Trust Account and
will be paid in cash upon the closing of a Business Combination, subject to the terms of the underwriting agreement.
Forward
Purchase Agreement
On
August 3, 2021, the Company entered into a forward purchase agreement (“FPA”) that will provide for the purchase by it of
up to an aggregate of 5,000,000
units for an aggregate purchase price of up to $50,000,000, or $10.00
per unit, in a private
placement to close substantially concurrently with the closing of our initial business combination. The forward purchase investor will
determine in its sole discretion the specific number of forward purchase units it will purchase, if any, pursuant to the forward purchase
agreement. Each forward purchase unit will consist of one Class A ordinary share and one- fourth of one redeemable warrant. The
terms of the forward purchase units will generally be identical to the terms of the units being issued in this offering, except that
the securities underlying the forward purchase units will be subject to certain registration rights.
Consistent
with the warrant liability discussed in Note 9, the Company accounts for the FPA in accordance with the guidance contained in ASC 815-40.
Such guidance provides that because the FPA units do not meet the criteria for equity treatment thereunder, each unit must be recorded
as a liability. Accordingly, the Company classifies the FPA as a liability at its fair value. This liability is subject to re-measurement
at each balance sheet date. With each such remeasurement, the FPA liability is adjusted to fair value, with the change in fair value
recognized in the Company’s statement of operations.
NOTE
7. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
The
Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control
and subject to the occurrence of future events. The Company is authorized to issue 500,000,000 shares of Class A ordinary shares
with a par value $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each
share. As of JuneSeptember 30, 2022 and December 31, 2021, there were 22,940,811 Class A ordinary shares outstanding,
respectively, which were subject to possible redemption and are classified outside of permanent equity in the condensed balance sheets.
NOTE
8. SHAREHOLDERSHAREHOLDERS’S DEFICIT
Preferred
Shares—The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred shares. At JuneSeptember 30,
2022 and December 31, 2021, there were no preferred shares issued or outstanding, respectively.
Class
A Ordinary shares—The Company is authorized to issue up to 500,000,000 shares of Class A, $0.0001 par value ordinary shares.
par value
ordinary shares. Holders of the Company’s ordinary shares are entitled to one vote for each share. At JuneSeptember 30, 2022 and
December 31, 2021, there were no Class A ordinary shares issued or outstanding, respectively.
Founder
shares—The Company is authorized to issue up to 30,000,000 class F ordinary shares, $0.0001 par value and 30,000,000 class
G ordinary shares, $0.0001 par value, out of which we have issued par value, out of which we have issued 2,548,979 Class F ordinary shares and Class F ordinary shares and 5,097,958 Class
G ordinary shares. Holders of the Company’s ordinary shares are entitled to one vote for each share. At JuneSeptember 30, 2022
and December 31, 2021, there were 2,548,979 Class F and 5,097,958 Class G ordinary shares issued and outstanding,
respectively (see note 5).
Shareholders
of record are entitled to one vote for each share held (on an as-converted to Class A ordinary share basis) on all matters to be voted
on by shareholders. Prior to our initial business combination, only holders of our Class F ordinary shares will have the right to vote
on the appointment of directors. Holders of our Class G ordinary shares and public shares will not be entitled to vote on the appointment
of directors during such time.
The
Class F founder shares will automatically convert into Class A ordinary shares on the first business day following the closing of our
initial business combination, at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Class F founder
shares will equal, in the aggregate on an as converted basis, 10% 10% of the sum of (i) the total number of all Class A ordinary
shares issued and outstanding upon completion of this offering (including any over-allotment shares if the underwriters exercise their
over-allotment option and without giving effect to any redemptions of any public shares in connection with the initial business combination),
plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion of the Class F founder shares,
plus (iii) unless waived by our sponsor, the total number of Class A ordinary shares or equity- linked securities exercisable for or
convertible into Class A ordinary shares issued, deemed issued, or to be issued, in connection with or in relation to the consummation
of the initial business combination, including any forward purchase shares, and excluding (x) any Class A ordinary shares or equity-linked
securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial
business combination and (y) any Class A ordinary shares issuable upon conversion of the Class G founder shares. Prior to our initial
business combination, only holders of our Class F ordinary shares will be entitled to vote on the appointment of directors.
The
Class G founder shares will convert into Class A ordinary shares after our initial business combination only to the extent certain triggering
events occur prior to the applicable anniversary of our initial business combination including three triggering events based on our shares
trading at $15.00, $20.00 and $25.00 per share following the closing of our initial business combination and also upon specified
strategic transactions, in each case, as described in this prospectus. The Class G founder shares will be convertible into Class A ordinary
shares at a ratio such that the number of Class A ordinary shares issuable upon conversion of all founder shares (including both Class
F founder shares and Class G founder shares) would equal, in the aggregate on an as-converted basis, 15%, 20% % and 25% % (based
on varying triggers as discussed in more detail in this prospectus) of the sum of (i) the total number of all Class A ordinary shares
issued and outstanding upon completion of this offering (including any over-allotment shares if the underwriters exercise their over-allotment
option and without giving effect to any redemptions of any public shares in connection with the initial business combination), plus (ii)
the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion of the Class F founder shares and Class
G founder shares, plus (iii) unless waived by our sponsor, the total number of Class A ordinary shares or equity-linked securities exercisable
for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, in connection with or in relation to the consummation
of the initial business combination, including any forward purchase shares and excluding any Class A ordinary shares or equity-linked
securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial
business combination.
The
Class G ordinary shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination), as well as
various market conditions (i.e., stock price targets after consummation of the Business Combination). The various market conditions are
considered in determining the grant date fair value of these instruments using Monte Carlo simulation. Compensation expense related to
the Class G ordinary shares is recognized only when the performance condition is probable of occurrence.
NOTE
9. WARRANT LIABILITIES
The
Company accounts for its 9,029,283 warrants (comprised of 5,735,202 Public Warrants and the 3,294,081 Private
Placement Warrants) issued in connection with the Proposed Public Offering in accordance with the guidance contained in ASC 815-40. Such
guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as
a liability. Accordingly, the Company classifies each as a warrant liability at its fair value. These warrant liabilities are subject
to re-measurement at each balance sheet date. With each such remeasurement, the warrant liability will be adjusted to fair value, with
the change in fair value recognized in the Company’s statement of operations.
Warrants—Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable 30 days after the consummation of a Business Combination. The Public Warrants will
expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.
The
Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a Public Warrant and will have no obligation
to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A
ordinary shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject
to the Company satisfying its obligations with respect to registration. No Public Warrant will be exercisable for cash or on a cashless
basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance
of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption
from registration is available.
The
Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of a Business
Combination, it will use its best efforts to file with the SEC a registration statement registering the issuance, under the Securities
Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants. The Company will use its best efforts to file with
the SEC a registration statement covering the shares of Class A ordinary shares issuable upon exercise of the warrants, to cause such
registration statement to become effective and to maintain a current prospectus relating to those shares of Class A ordinary shares until
the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the shares of Class
A ordinary shares issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business
Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company
will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with
Section 3(a)(9) of the Securities Act or another exemption.
Redemption
of warrants when the price per Class A ordinary share equals or exceeds $18.00. Once the warrants become exercisable, the
Company may redeem the Warrants for redemption:
|
● |
in
whole and not in part; |
|
● |
at
a price of $0.01 per Public Warrant; |
|
● |
upon
not less than 30 days’ prior written notice of redemption to each warrant holder and |
|
● |
if,
and only if, the reported last sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for
adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described) for any 20 trading
days within a 30-trading day period ending three business days before the Company sends the notice of redemption to the warrant
holders. |
The
Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering
the issuance of the Class A ordinary shares issuable upon exercise of the warrants is then effective and a current prospectus relating
to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by
us, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for
sale under all applicable state securities laws.
Redemption
of warrants when the price per Class A ordinary share equals or exceeds $10.00. Once the Warrants become exercisable, the
Company may redeem the Warrants for redemption:
|
● |
in
whole and not in part; |
|
● |
at
$0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be
able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference
to the table based on the redemption date and the “fair market value” of our Class A ordinary shares; |
|
● |
if,
and only if, the Reference Value (as defined above under “Redemption of warrants when the price per Class A ordinary share
equals or exceeds $18.00”) equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable
upon exercise or the exercise price of a warrant); and |
|
● |
if
the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise
or the exercise price of a warrant), the private placement warrants must also concurrently be called for redemption on the same terms
as the outstanding public warrants, as described above. |
If
and when the Public Warrants become redeemable by the Company, the Company may not exercise its redemption right if the issuance of shares
of ordinary shares upon exercise of the warrants is not exempt from registration or qualification under applicable state blue sky laws
or the Company is unable to affect such registration or qualification.
The
exercise price and number of shares of Class A ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances
including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. Additionally, in no event will
the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the
Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds
with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account
with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption,
management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,”
as described in the warrant agreement. The exercise price and number of shares of ordinary shares issuable upon exercise of the Public
Warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization,
reorganization, merger or consolidation. If the Company is unable to complete a Business Combination within the Combination Period and
the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their
warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such
warrants. Accordingly, the warrants may expire worthless.
In
addition, if (x) the Company issues additional shares of Class A ordinary shares or equity- linked securities for capital raising purposes
in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per
share of Class A ordinary shares (with such issue price or effective issue price to be determined in good faith by the Company’s
board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares
held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate
gross proceeds from such issuances represent more than 60% % of the total equity proceeds, and interest thereon, available for
the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination
(net of redemptions), and (z) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading
day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price,
the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent)
to be equal to 115% % of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger
price described above will be adjusted (to the nearest cent) to be equal to 180% of the greater of the Market Value and the Newly
Issued Price.
The
Private Placement Warrants will be identical to the Public Warrants included in the Units being sold in the Initial Public Offering,
except that the Private Placement Warrants will and the shares of ordinary shares issuable upon the exercise of the Private Placement
Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject
to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable
so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone
other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and
exercisable by such holders on the same basis as the Public Warrants.
NOTE
10. FAIR VALUE MEASUREMENT
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
|
● |
Level 1, defined as observable
inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
|
● |
Level 2, defined as inputs
other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments
in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
|
● |
Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations
derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at JuneSeptember 30, 2022 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such
fair value:
Schedule Of Fair Value Hierarchy For Assets and Liabilities Measured At Fair Value on a Recurring basis | |
| | | |
| | | |
| | | |
| | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Warrant Liabilities: | |
| | | |
| | | |
| | | |
| | |
Public Warrants | |
$ | 1,204,392 | | |
$ | - | | |
$ | - | | |
$ | 1,204,392 | |
Private Placement Warrants | |
| - | | |
| - | | |
| 691,757 | | |
| 691,757 | |
Total Warrant Liabilities | |
$ | 1,204,392 | | |
$ | - | | |
$ | 691,757 | | |
$ | 1,896,149 | |
| |
| | | |
| | | |
| | | |
| | |
FPA | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
The
following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring
basis at December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such
fair value:
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Warrant Liabilities: | |
| | | |
| | | |
| | | |
| | |
Public Warrants | |
$ | 4,874,922 | | |
$ | - | | |
$ | - | | |
$ | 4,874,922 | |
Private Placement Warrants | |
| - | | |
| - | | |
| 2,799,969 | | |
| 2,799,969 | |
Total Warrant Liabilities | |
$ | 4,874,922 | | |
$ | - | | |
$ | 2,799,969 | | |
$ | 7,674,891 | |
| |
| | | |
| | | |
| | | |
| | |
FPA | |
$ | - | | |
$ | - | | |
$ | 150,000 | | |
$ | 150,000 | |
The
warrant liabilities and FPA assets were accounted for in accordance with ASC 815-40 and are presented within warrant liabilities and
FPA assets on our condensed balance sheets. The warrant liabilities and FPA asset/liability measured at fair value at inception and on
a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities and change in fair value of
FPA assets, respectively, in the condensed statements of operations.
Level
1 instruments include the Public Warrants. The Company uses inputs such as actual trade data, benchmark yields, quoted market prices
from dealers or brokers, and other similar sources to determine the fair value of its investments. The Public Warrants for periods where
no observable traded price was available are valued using a barrier option simulation. For the quarter ended JuneSeptember 30, 2022
(the periods subsequent to the detachment of the Public Warrants from the Units), the Public Warrant quoted market price was used as
the fair value as of each relevant date.
Initial
Measurement
Warrants
The
Warrants are accounted for as liabilities in accordance with ASC 815-40 and presented within warrant liabilities on our condensed balance
sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented
within change in fair value of warrant liabilities in the condensed statements of operations.
The
Private Warrants are valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement.
The Modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Warrants is
the expected volatility of the ordinary shares. The expected volatility as of the IPO date was derived from observable public warrant
pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation
dates was implied from the Company’s own public warrant pricing.
Schedule Of Fair Value Of Assets and Liabilities Valuation Techniques and Measurement Inputs | |
| | | |
| | |
Input | |
September 30, 2022 | | |
December 31, 2021 | |
Risk-free interest rate | |
| 4.20 | % | |
| 1.25 | % |
Expected term (years) | |
| 5 | | |
| 5 | |
Expected Volatility | |
| 4.2 | % | |
| 14.8 | % |
Exercise Price | |
$ | 11.50 | | |
$ | 11.50 | |
Share Price | |
$ | 11.50 | | |
$ | 11.50 | |
The
following table presents a summary of the changes in the fair value of the Private Placement Warrants, a Level 3 liability, measured
on a recurring basis.
Summary of the changes in the fair value of the warrants measured on recurring basis | |
| | |
Fair Value as of August 6, 2021 | |
$ | 3,524,667 | |
Change in valuation inputs or other assumptions(1) | |
| (724,698 | ) |
Fair Value as of December 31, 2021 | |
$ | 2,799,969 | |
Change in valuation inputs or other assumptions(1) | |
| (2,108,212 | ) |
Fair Value as of September 30, 2022 | |
$ | 691,757 | |
FPA
The
FPAs were valued using a discounted cash flows method, which is considered to be a Level 3 fair value measurement. Under the discounted
cash flow method utilized, the aggregate commitment of $200 million pursuant to the FPAs is discounted to present value and compared
to the fair value of the ordinary shares and warrants to be issued pursuant to the FPAs. The fair value of the ordinary shares and warrants
to be issued under the FPAs are based on the public trading price of the Units issued in the Company’s IPO. The excess (liability)
or deficit (asset) of the fair value of the ordinary shares and warrants to be issued compared to the $50 million fixed commitment is
then reduced to account for the probability of consummation of the Business Combination. The primary unobservable input utilized in determining
the fair value of the FPA is the probability of consummation of the Business Combination. As of December 31, 2021, the probability
assigned to the consummation of the Business Combination was 95% which was determined based on observed success rates of business combinations
for special purpose acquisition companies.
Summary of the changes in the fair value of the FPA Asset | |
| | |
Fair Value as of August 6, 2021 – Liability | |
$ | 100,000 | |
Change in valuation inputs or other assumptions(1) | |
| (250,000 | ) |
Fair Value as of December 31, 2021 – (Asset) | |
$ | (150,000 | ) |
Change in valuation inputs or other assumptions(1) | |
| 150,000 | |
Fair Value as of September 30, 2022 | |
$ | - | |
Note
11 – Subsequent Events
Management
of the Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited
condensed financial statements were issued. Other than as described in these financial statements, the Company did not identify any subsequent
events that would have required adjustment or disclosure in the unaudited condensed financial statements.
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References
to “we”, “us”, “our” or the “Company” are to Blue Whale Acquisition Corp I, except where
the context requires otherwise. References to our “management” or our “management team” refer to our officers
and directors, and references to the “Sponsor” are to Blue Whale Sponsor I LLC. The following discussion should be read in
conjunction with our condensed financial statements and related notes thereto included elsewhere in this reportQuarterly Report. Certain information
contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many factors.
Cautionary
Note Regarding Forward-Looking Statements
This
Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, as amended,
and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results
to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q
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 “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would”
and variations thereof 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
10-K filed with the SEC on April 11for the year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 11,
2022, Form 10-Q for the quarter ended March 31, 2022 filed with the SEC on May 23, 2022, and Form 10-Q for the quarter ended June 30,
2022 filed with the SEC on August 12, 2022. The Company’s securities filings 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 blank check company incorporated as a Cayman Islands exempted company on March 10, 2021, 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
(“Business Combination”). While we may pursue an initial Business Combination target in any industry or geographic location,
we intend to focus our search for a target business operating in the media, entertainment and technology industries. Our Sponsor, Blue Whale SponsorWe have not selected
any Business Combination target and we have not, nor has anyone I LLC, a Cayman Islands limited
liability company.on our behalf, initiated any substantive discussions, directly or indirectly,
with any Business Combination target.2 We intend to effectuate our initial Business Combination using cash from the proceeds
of our initial public offeringInitial Public Offering (defined below) and the private placement of the private placement warrantsPrivate Placement Warrants (defined below), our shares,
debt or a combination of cash, equity and debt. We expect to continue to incur significant costs in the pursuit of our acquisition plans.
We cannot assure you that our plans to complete a Business Combination will be successful.
Our
registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on August 3,
2021. On August 6, 2021, we consummated our Initial Public Offering of 20,000,000 units, including the issuance of 2,940,811 units
as a result of the underwriters’ full exercise of their over-allotment option (the “Units” and, with respect to the
Class A ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds
of $229,408,110. Each Unit consisted of one Public Share and one-fourth of one redeemable Warrant. Each whole Public Warrant entitles the holder to purchase one Public Share for $11.50
per share, subject to adjustment.
warrant (the “Public Warrants”).
Each whole Public Warrant entitles the holder to purchase one Public Share for $11.50 per share, subject to adjustment.
Simultaneously
with the closing of the Initial Public Offering, we consummated a private placement (the “Private Placement”) of 3,000,000
Warrants (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”) at a price
of $2.00 per Private Placement Warrant to the Sponsor, generating grow proceeds of $6,000,000.
2
NTD: Company to confirm.
Following
the closing of the Initial Public Offering on August 6, 2021, $200,000,000 ($10.00 per Unit) from the net proceeds of the sale of
the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a non-interest bearing Trust Account
(the “Trust Account”). If, in the future, the proceeds held in the Trust Account are invested, then the proceeds will be
invested only in U.S. government treasury obligations bills with a maturity of 185 days or less or in money market funds meeting certain
conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Assuming
an interest rate of 0.10% per year, the trust accountTrust Account may generate approximately $200,000 of interest annually; however, we can provide
no assurances regarding this amount or that we will invest in U.S. government treasury obligations. We will not be permitted to withdraw
any of the principal or interest held in the trust accountTrust Account except for the withdrawal of interest to pay taxes, if any. The funds held
in the trust accountTrust Account will not otherwise be released from the trust accountTrust Account until the earliest of: (1) our completion of an initial business
combinationBusiness
Combination; (2) the redemption of any public sharesPublic Shares properly submitted in connection with a shareholder vote to amend our amendedAmended and
restated memorandumRestated Memorandum and articlesArticles of associationAssociation (A) to modify the substance or timing of our obligation to allow redemption in connection
with our initial business combinationBusiness Combination or to redeem 100% of our public sharesPublic Shares if we do not complete our initial business combinationBusiness Combination within
24 months from the closing of this offeringthe Initial Public Offering or (B) with respect to any other provision relating to shareholders’
rights or pre-initial business combinationBusiness Combination activity; and (3) the redemption of our public sharesPublic Shares if we have not completed an initial
business combinationBusiness Combination within 24 months from the closing of this offeringthe Initial Public Offering, subject to applicable law.
IfWe
have 24 months from the closing of the Initial Public Offering to complete the initial Business Combination (the “Combination Period”).
However, if we are unable to complete our initial Business Combination within 24 months from the Combination Periodclosing of our Initial Public Offering
or during any extended time that we have to consummate a Business Combination beyond 24 months (an “Extension Period”), we
will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business
days thereafter, redeem the public sharesPublic Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the
Trust Account, divided by the number of then outstanding public sharesPublic Shares, which redemption will completely extinguish publicPublic Shareholder’s
rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii)
as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the Company’s
board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case
to its obligations under Cayman Islands law to provide for claims of creditors and the requirements of applicable law. There will be
no redemption rights or liquidating distribution with respect to our Warrants, which will expire worthless if we fail to complete our
initial Business Combination within the 24-month time period or during any Extension Period.
Liquidity
and Capital Resources
On
August 6, 2021 the Company consummated the Initial Public Offering of 20,000,000 units, generating gross proceeds of $200,000,000.
Simultaneously with the closing of the Initial Public Offering, the Company consummated a private placement of 3,000,000 Warrants at
a price of $2.00 per Private Placement Warrant to its Sponsor, generating gross proceeds of $6,000,000.
On
August 16, 2021, the underwriters partially exercised the over-allotment option and purchased an additional 2,940,811 Units, generating
an aggregate of gross proceeds of $29,408,110, incurred $588,162 in cash underwriting fees, and forfeited the remainder of the option,
which over-allotment closed on August 18, 2021. Simultaneously with the closing of the exercise of the over-allotment option, the
Company completed the private sale of an aggregate of 294,081 Private Warrants to the Company’s Sponsor, at a purchase price of
$2.00 per Private Warrant, generating gross proceeds of $588,162.
Following
the consummation of the Initial Public Offering on August 6, 2021, an amount of $200,000,000 ($10.00 per Unit) from the net proceeds
of the sale of the Units in the Initial Public Offering was placed in the Trust Account. Transaction costs amounted to $13,781,962 consisting
of $4,588,162 of underwriting fees, $8,029,284 of deferred underwriting fees and $1,164,516 of other costs.
As
of JuneSeptember 30, 2022 and December 31, 2021, we had approximately $229,408,110 cash held in the Trust Account. We intend to
use substantially all of the funds held in the Trust Account and the proceeds from the sale of the forward purchase shares as described
below to complete our Business Combination. To the extent that our shares or debt is used, in whole or in part, as consideration to complete
our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations
of the post-Business Combination entity, make other acquisitions and pursue our growth strategies.
As
of JuneSeptember 30, 2022 and December 31, 2021, we had cash of $2,281131,197424 and $66,156 held outside of the Trust Account, respectively.
We intend to use the funds held outside of the Trust Account primarily to identify and evaluate target businesses, perform business due
diligence on prospective target businesses, travel to and from the offices, properties, or similar locations of prospective target businesses
or their representative or owners, review corporate documents and material agreements of prospective target businesses, and structure,
negotiate and complete a Business Combination.
In
order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or our officers
and directors may provide us working capital loans (“Working Capital Loans”). On February 16, 2022, the Sponsor confirmed
to the Company that it will provide any such Working Capital Loans for at least the next twelve months. On February 22, 2022, the
Company drew down and received cash proceeds of $2.5 million. The outstanding balance under this loan is $2.5 million as of June September
30, 2022. If we complete a Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a 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 for such repayment. Up to $2,500,000 of such loans
may be convertible into warrantsWarrants, at a price of $2.00 per warrantWarrant, at the option of the lender. The warrantsWarrants would be identical to the
Private Placement Warrants.
In
connection with the Company'’s assessment of going concern considerations in accordance with the authoritative guidance in Financial
Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties
about an Entity'’s Ability to Continue as a Going Concern.” The Company has until August 6, 2023, 24 months from the closing
of the IPO, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination
by the specified period. If a Business Combination is not consummated by August 6, 2023 and the Company decides not to extend the period
of time to consummate a Business Combination, there will be a mandatory liquidation and subsequent dissolution.
The
Company’s date for mandatory liquidation and subsequent dissolution raise substantial doubt about the Company'’s ability to
continue as a going concern one year from the date that these condensed financial statements are issued. These condensed financial statements
do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
Results
of Operations
Our
only activities from inception through June September 30, 2022, were those related to our formation, the preparation for our Initial Public
Offering and, since the closing of the Initial Public Offering, the search for a prospective initial Business Combination. We have neither
engaged in any operations nor generated any operating revenues to date. We will not generate any operating revenues until after completion
of our initial Business Combination, at the earliest. We incurred expenses as a result of being a public company (including for legal,
financial reporting, accounting and auditing compliance), as well as for expenses in connection with searching for a prospective initial
Business Combination.
For
the three months ended June September 30, 2022, we had a net income of $1534,335,318152 which is comprised of formation and operating expenses of
$380368,246776 and a change in fair value of the warrantWarrant liability of $1902,715,564928.
For
the three months ended JuneSeptember 30, 2021, we had a net income of $01,017,594 which is comprised of formation and operating expenses
of $0337,701, unrealized gain on marketable securities held in trust $5,000, transaction costs allocable to warrant liability of $342,640,
a change in fair value of the warrant liability $1,492,935 and a change in fair value of FPA asset of $200,000.
For
the sixnine months ended June September 30, 2022, we had a net income of $34,785319,610761 which is comprised of formation and operating expenses of
$9401,203308,980, a change in fair value of the warrantWarrant liability of $45,875778,813741 and a change in the fair value of the FPAForward Purchase Agreements
of $150,000.
For
the period from March 10, 2021, through June September 30, 2021, we had a net loss of $5865,000634, which is comprised of formation and operating
expenses of $5984,902, transaction costs allocable to warrant liability of $385,907, a change in fair value of the warrant liability $1,986,443
and a change in fair value of FPA asset of $250,000.
Related
Party Transactions
Founder
Shares
On
March 11, 2021, the Company issued an aggregate of 5,750,000 shares of Class B ordinary shares (the “Founder Shares”)
to the Sponsor for an aggregate purchase price of $25,000. The Founder Shares include an aggregate of up to 750,000 shares subject to
forfeiture by the Sponsor to the extent that the underwriters’ over-allotment is not exercised in full or in part. Such shares
have been recapitalized into 2,548,979 Class F ordinary shares and 5,097,958 Class G ordinary shares (which we respectively refer to
as “Class F founder shares” and “Class G founder shares,” and collectively refer to as “founder sharesFounder Shares”
as further described herein). Pursuant to a re-organization of the Company’s share capital effective July 5, 2021, the Class
B ordinary shares have been canceled and all of the shares presently issued and outstanding are Class F ordinary shares and Class G ordinary
shares. (See Note 9).
On
August 18, 2021, the underwriters partially exercised the over-allotment option resulting in the issuance of an additional 326,757
Class F ordinary shares and 653,513 Class G ordinary shares to the Sponsor.
The
Sponsor has agreed not to transfer, assign or sell any of its Founder Shares until two years after the completion of a Business Combination.
Related
Party Loans
On
March 11, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public
Offering pursuant to a promissory note (the “Note”). The Note is non-interest bearing and is payable on the earlier of (i)
December 31, 2022 or (ii) the date the Company completes its initial Business Combination. As of June September 30, 2022 and December
31, 2021, the Company had $156,384 outstanding on the Note, which is classified as current on our Condensed Balance Sheets.
In
order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor,
or the Company’s officers and directors may loan the Company funds as may be required (the “Working Capital Loans”).
Such Working Capital Loans would be evidenced by promissory notes. On February 16, 2022, the Sponsor confirmed to the Company that
it will provide any such Working Capital Loans for at least the next twelve months, pursuant to a promissory note. On February 22,
2022, the Company drew down and received cash proceeds of $2.5 million. The outstanding balance under this loan is $2.5 million as of
September 30, 2022. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s
discretion, up to $2,500,000 of notes may be converted upon consummation of a Business Combination into warrantsWarrants at a price of $2.00
per warrantWarrant. The warrantsWarrants will be identical to the Private Placement Warrants. 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.
In
addition, our Sponsor, officers and directors, or our respective affiliates will be reimbursed for any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, executive
officers or directors, or our affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside
the Trust Account. There was $325,000 due to related party as at June September 30, 2022 and December 31, 2021.
Contractual
Obligations
Administrative
Services Agreement
Commencing
on the date that our securities were first listed on Nasdaq through the earlier of consummation of the initial Business Combination and
the liquidation, we agreed to pay our Sponsor $10,000 per month for office space, secretarial and administrative services provided to
us by an affiliate of our Sponsor. There was no balance due to related parties at June 30, 2022 and December 31, 2021, respectively.
September 30, 2022 and December 31, 2021, respectively.
Registration
Rights Agreement
The
holders of the Founder Shares, Private Placement Shares, and any shares that may be issued upon conversion of Working Capital Loans (and
any Class A ordinary shares issuable upon conversion of the Founder Shares) wereare entitled to registration rights pursuant to a registration
and shareholder rights agreement signed upon the effective date of the Initial Public Offering. The holders of these securities wereare entitled
to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders hadhave certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. We
will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting
Agreement
The
underwritersUnderwriters were paid a cash underwriting discount of 2.00% of the gross proceeds of the Initial Public Offering, or $4,588,162. In
addition, the underwriters will be entitled to a deferred fee of three and half percent (3.50%) of the gross proceeds of the Initial
Public Offering, or $8,029,284. On August 16, 2021, the underwritersUnderwriters partially exercised the over-allotment option and purchased
an additional 2,940,811 Over-Allotment Units, generating an aggregate of gross proceeds of $29,408,110, incurred $588,162 in cash underwriting
fees and $1,029,284 in deferred underwritersUnderwriters’ fees, and forfeited the remainder of the option, which over-allotment closed on August 18,
2021. The deferred fee was placed in the Trust Account and will be paid in cash upon the closing of a Business Combination, subject to
the terms of the underwriting agreement.
Forward
Purchase Agreement
The
Company entered into a forward purchase agreement with MIC Capital Partners (Public) Parallel Cayman, LP, an affiliate of the Sponsor,
providing for the purchase, in its sole discretion, an aggregate of up to 5,000,000 Units for an aggregate purchase price of up to $50,000,000,
or $10.00 per Unit, in a private placement to close substantially concurrently with the closing of our initial Business Combination.
The forward purchase investor will determine in its sole discretion the specific number of forward purchase Units it will purchase, if
any, pursuant to the forward purchase agreement. Each forward purchase Unit will consist of one Class A ordinary share and one-fourth
of one redeemable Warrant. The terms of the forward purchase Units will generally be identical to the terms of the units beingUnits issued in the
Initial Public Offering, except that the securities underlying the forward purchase Units will be subject to certain registration rights.
Critical
Accounting Estimates
This
management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,
which have been prepared in accordance with United States Generally Accepted Accounting Polices (“GAAP”). The preparation
of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues
and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on
historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions. The company has identified
the following as its critical accounting policies:
Derivative
Financial Instruments
The
Company accounts for the Warrants and Forward Purchase Agreements (“FPAs”) as either equity-classified or liability-classified
instruments based on an assessment of the specific terms of the Warrants and FPAs and the applicable authoritative guidance in Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities
from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“Warrants and FPAs ASC 815”).
The assessment considers whether they are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the Warrants and FPAs
are indexed to the Company’s own ordinary shares and whether the holders of the Warrants could potentially require “net cash
settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and execution of the FPAs and as
of each subsequent quarterly period end date while the Warrants and FPAs are outstanding. For issued or modified warrantsWarrants and FPAs that
meet all of the criteria for equity classification, such warrantsWarrants are required to be recorded as a component of additional paid-in capital
at the time of issuance. For issued or modified warrantsWarrants and FPAs that do not meet all the criteria for equity classification, such warrantsWarrants
are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the
estimated fair value of liability-classified warrantsWarrants are recognized as a non-cash gain or loss on the statements of operations.
Recently
Issued Accounting Standards
In
August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options
(Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”)
to simplify accounting for certain financial instruments. ASU 2020- 06 eliminates the current models that require separation of beneficial
conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining
to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible
debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings
per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective
for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted.
The Company is currently evaluating the impact this guidance will have on its financial statements.
Management
does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material
effect on our financial statements.
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.
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 disclosure controls and procedures as of June September 30, 2022, as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
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.
Based
on this evaluation, our principal executive officer and principal financial officer have concluded that during the period covered by
this report, our disclosure controls and procedures were effective as of June 30, 2022.
September 30, 2022.
Changes
in Internal Control over Financial Reporting
There
was no change in our internal control over financial reporting that occurred during the three-month period up to June September 30, 2022,
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 except for the below:.
Remediation of a Material Weakness in Internal
Control over Financial Reporting
We recognize the importance of
the control environment as it sets the overall tone for the Company and is the foundation for all other components of internal control.
Consequently, we designed and implemented remediation measures to address the material weakness previously identified and enhance our
internal control over financial reporting. In light of the material weakness, we enhanced our processes to identify and appropriately
apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply
to our financial statements, including providing enhanced access to accounting literature, research materials and documents and increased
communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The foregoing
actions, which we believe remediated the material weakness in internal control over financial reporting, were completed as of June 30,
2022.
PART
II—OTHER INFORMATION
Item 1.
Legal Proceedings
None.
Item 1A.
Risk Factors
Factors
that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks previously disclosed
in our Annual Report on Form 10-K filed with the SEC on April 11, 2022, and our Quarterly Report on Form 10-Q for the period
ended June 30March 31, 2022, filed with the SEC on May 23, 2022 and our Quarterly Report on Form 10-Q for the period ended September 30,
2022, filed with the SEC on August 12, 2022. Any of those 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. As of the date of this Quarterly Report, there have been no material changes to the risk
factors disclosed in our Annual Report on Form 10-K filed with the SEC on April 11, 2022, and our Quarterly Report on Form 10-Q
for the period ended March 31, 2022, filed with the SEC on May 23, 2022, exceptand as describe below. We may disclose changes to such factors or disclose additional
factors from time to time in our future filings with the SEC.
Our proximity to our
liquidation date expresses substantial doubt about our ability to continue as a “going concern.”
In connection with the Company’s
assessment of going concern considerations in accordance with the FASB ASU 2014-15, “Disclosures of Uncertainties about an Entity’s
Ability to Continue as a Going Concern,” management has determined that mandatory liquidation and subsequent dissolution raises
substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts
of assets or liabilities should the Company be required to liquidate after August 6, 2023. The financial statements do not include any
adjustment that might be necessary if the Company is unable to continue as a going concern.our Quarterly Report on Form 10-Q for the period
ended September 30, 2022, filed with the SEC on August 12, 2022. We may disclose changes to such factors or disclose additional factors
from time to time in our future filings with the SEC.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
Unregistered
Sales
In
March 2021, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain offering costs in consideration for 5,750,000
Class B ordinary shares, par value $0.0001. Up to 750,000 founder sharesFounder Shares were subject to forfeiture by the Sponsor depending on the extent
to which the underwriters’ over-allotment option was exercised. Such shares have been recapitalized into 2,548,979 Class F ordinary
shares and 5,097,958 Class G ordinary shares (which we respectively refer to as “Class F founder shares” and “Class
G founder shares,” and collectively refer to as “founder sharesFounder Shares”). Pursuant to a re-organization of the Company’s
share capital effective July 5, 2021, the Class B ordinary shares have been canceled and all of the shares presently issued and
outstanding are Class F ordinary shares and Class G ordinary shares.
Simultaneously
with the consummation of the Initial Public Offering, we consummated a private placement of 3,000,000 Private Placement Warrants to our
Sponsor at a price of $2.00 per Private Placement Warrant, generating total proceeds of $6,000,000. On August 16, 2021, simultaneously
with the issuance and sale of the Over-Allotment Units, the Company consummated the sale of an additional 294,081 Private Placement Warrants
to the Sponsor at a purchase price of $2.00 per Private Placement Warrant, generating gross proceeds of $588,162.
The
Private Placement Warrants are identical to the warrantsWarrants sold as part of the Units in the Initial Public Offering except that, so long
as they are held by the Sponsor or its permitted transferees: (1) they willare not be redeemable by us (except in certain redemption scenarios
when the price per Class A ordinary share equals or exceeds $10.00 (as adjusted)); (2) they (including the Class A ordinary shares issuable
upon exercise of these warrantsWarrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our Sponsor until
30 days after the completion of our initial Business Combination; (3) they may be exercised by the holders on a cashless basis; and (4)
they (including the ordinary shares issuable upon exercise of these warrantsWarrants) are entitled to registration rights.
Of
the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $229,408,110 were placed in the Trust
Account.
We
paid a total of $4,588,162 in underwriting discounts and commissions and $1,164,516 of other offering costs (including in connection
with the exercise of the over-allotment option). In addition, the underwritersUnderwriters agreed to defer $8,029,284 in underwriting discounts and
commissions (including those attributable to the Units sold in connection with the exercise of the over-allotment option).
Use
of Proceeds
The
registration statement for the Company’s Initial Public Offering was declared effective on August 3, 2021. On August 6,
2021, the Company consummated the Initial Public Offering of 22,940,811 units, including the issuance of 2,940,811 units as a result
of the underwriters’ full exercise of their over-allotment option, at $10.00 per Unit, generating gross proceeds of $229,408,110.
On August 16, 2021, the Underwriters partially exercised the over-allotment option and purchased an additional 2,940,811 Over-Allotment
Units, generating additional gross proceeds of $229,408,110. Each Unit consisted of one Public Share and one-fourth of one redeemable
Warrant. Each whole Public Warrant entitles the holder to purchase one Public Share for $11.50 per share, subject to adjustment.
Simultaneously
with the closing of the Initial Public Offering, the Company consummated a private placement of 3,294,081 Warrants at a price of $2.00
per Private Placement Warrant to the Sponsor, generating gross proceeds of $6,588,162.
In
connection with the Initial Public Offering, we incurred offering costs of $13,781,962 (including deferred underwriting commissions of
approximately $8,029,284). Other incurred offering costs consisted principally of preparation fees related to the Initial Public Offering.
After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation
of the initial Business Combination, if consummated) and the Initial Public Offering expenses, $229,408,110 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. The net proceeds of the Initial Public Offering and certain proceeds
from the sale of the Private Placement Warrants are held in the Trust Account as described elsewhere in this Quarterly Report on Form 10-Q.
There
has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described
in the Company’s final prospectus related to the Initial Public Offering.
For
a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not
applicable.
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.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
|
Blue
Whale Acquisition Corp I |
|
|
|
Date: AugustNovember
1214, 2022 |
|
/s/
Maxime Franzetti |
|
Name: |
Maxime Franzetti |
|
Title: |
Chief Executive Officer
and President |
|
|
(Principal Executive
Officer) |
|
|
|
Date: August 12November 14,
2022 |
|
/s/
Russ Pillar |
|
Name: |
Russ Pillar |
|
Title: |
Chief Financial Officer |
|
|
(Principal Financial
and Accounting Officer) |
EXHIBIT
31.1
CERTIFICATION
PURSUANT
TO RULE 13a-14 AND 15d-14
UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I,
Maxime Franzetti, certify that:
|
1. |
I have reviewed this Quarterly
Report on Form 10-Q of Blue Whale Acquisition Corp I; |
|
2. |
Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report; |
|
3. |
Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’’s
other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
|
a) |
Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
|
b) |
[Paragraph omitted pursuant
to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313]; |
|
c) |
Evaluated the effectiveness
of the registrant’’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) |
Disclosed in this report
any change in the registrant’’s internal control over financial reporting that occurred during the registrant’’s most recent
fiscal quarter (the registrant’’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’’s internal control over financial reporting; and |
|
5. |
The registrant’’s
other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’’s auditors and the audit committee of the registrant’’s board of directors (or persons performing the
equivalent functions): |
|
(a) |
All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant’’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrant’’s internal control over
financial reporting. |
Date: August
12November 14, 2022 |
By: |
/s/
Maxime Franzetti |
|
Name: |
Maxime Franzetti |
|
Title: |
Chief Executive Officer |
|
|
(Principal Executive Officer) |
EXHIBIT
31.2
CERTIFICATION
PURSUANT
TO RULE 13a-14 AND 15d-14
UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I,
Russ Pillar, certify that:
|
1. |
I have reviewed this Quarterly
Report on Form 10-Q of Blue Whale Acquisition Corp I; |
|
2. |
Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report; |
|
3. |
Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
|
4. |
The registrant’’s
other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
|
a) |
Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
|
b) |
[Paragraph omitted pursuant
to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313]; |
|
c) |
Evaluated the effectiveness
of the registrant’’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
d) |
Disclosed in this report
any change in the registrant’’s internal control over financial reporting that occurred during the registrant’’s most recent
fiscal quarter (the registrant’’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’’s internal control over financial reporting; and |
|
5. |
The registrant’’s
other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’’s auditors and the audit committee of the registrant’’s board of directors (or persons performing the
equivalent functions): |
|
(a) |
All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant’’s ability to record, process, summarize and report financial information; and |
|
(b) |
Any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrant’’s internal control over
financial reporting. |
Date: August
12November 14, 2022 |
By: |
/s/
Russ Pillar |
|
|
Russ Pillar |
|
|
Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
EXHIBIT
32.1
CERTIFICATION
PURSUANT TO
18
U.S.C. 1350
18
U.S.C. 1350
(SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002)
In
connection with the Quarterly Report of Blue Whale Acquisition Corp I (the ““Company””) on Form 10-Q for the quarter ended
JuneSeptember 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the ““Report””), I, Maxime Franzetti,
Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(1) |
the Report fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
the information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: AugustNovember
1214, 2022 |
By: |
/s/
Maxime Franzetti |
|
Name: |
Maxime Franzetti |
|
Title: |
Chief Executive Officer |
|
|
(Principal Executive
Officer) |
EXHIBIT
32.2
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350,
AS
ADDED BY
AS
ADDED BY
SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of Blue Whale Acquisition Corp I (the ““Company””) on Form 10-Q for the quarter ended
JuneSeptember 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the ““Report””), I, Russ Pillar,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(1) |
the Report fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
(2) |
the information contained
in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: AugustNovember
1214, 2022 |
By: |
/s/
Russ Pillar |
|
|
Russ Pillar |
|
|
Chief Financial Officer |
|
|
(Principal Financial
and Accounting Officer) |
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