PLMJF 10-Q
Plum Acquisition Corp. III (PLMJF)
10-Q
2023-11-17
For: 2023-09-30
View Original
Added on
April 06, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended September 30, 2023
☐ 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 001-40677
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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10001
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(Address of principal executive offices)
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(Zip Code)
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+1 (212 ) 906-4480
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which
registered
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Securities registered pursuant to section 12(g) of the Act:
None.
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 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.
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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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 ☐
There were 15,582,409 Class A ordinary shares and 7,062,500 Class B ordinary shares of the registrant outstanding on November 17, 2023.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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September 30, 2023
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December 31, 2022
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(Unaudited)
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ASSETS
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Current assets:
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Cash
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$
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$
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Prepaid expenses
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Total current assets
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Investments held in Trust Account
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Total Assets
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$
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$
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LIABILITIES AND SHAREHOLDERS’ DEFICIT
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Current liabilities:
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Accounts payable
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$
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$
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Accounts payable - related party
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Accrued expenses and other current liabilities
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Accrued expenses - related party
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Total current liabilities
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Warrant liabilities
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Deferred underwriting fee payable
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Total Liabilities
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Commitments (Note 6)
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Class A ordinary shares subject to possible redemption,
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Shareholders’ Deficit
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Preference shares, $
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Class A ordinary shares, $
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Class B ordinary shares, $
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Additional paid-in capital
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Accumulated deficit
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(
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)
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(
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)
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Total Shareholders’ Deficit
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(
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(
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)
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Total Liabilities and Shareholders’ Deficit
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$
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$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
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Three Months
Ended September 30,
2023
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Three Months
Ended September 30,
2022
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Nine Months
Ended September 30,
2023
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Nine Months
Ended September 30,
2022
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Operating and formation costs
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$
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$
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$
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$
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Loss from operations
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(
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)
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(
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)
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(
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(
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Other income:
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Interest income on bank account
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Interest and dividend income on investments held in Trust Account
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Gain related to potential business combination
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| Change in fair value of convertible promissory note - related party |
( |
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Change in fair value of warrant liabilities
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(
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)
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(
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)
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(
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Net income
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$
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$
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$
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$
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Basic weighted average shares outstanding, Class A ordinary shares
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Basic net income per share, Class A ordinary shares
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$
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$
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$
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$
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Diluted weighted average shares outstanding, Class A ordinary shares
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Diluted net income per share, Class A ordinary shares
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$ | $ | $ | $ | ||||||||||||
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Basic and diluted weighted average shares outstanding, Class B ordinary shares
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Basic and diluted net income per share, Class B ordinary shares
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$
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$
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$
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$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
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Class A Ordinary Shares
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Class B Ordinary Shares
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Shares
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Amount
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Shares
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Amount
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Shareholders’
Deficit
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||||||||||||||||||||||
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Balance as of January 1, 2023
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$
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$
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$
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$
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(
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$
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(
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Remeasurement of Class A ordinary shares to redemption amount as of March 31, 2023
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—
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—
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(
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(
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Net income
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—
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—
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—
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—
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—
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Balance as of March 31, 2023
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$
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(
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(
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Remeasurement of Class A ordinary shares to redemption amount as of June 30, 2023
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—
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—
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(
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(
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Net income
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—
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—
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—
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—
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—
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Balance as of June 30, 2023
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(
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(
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Proceeds received in excess of initial fair value of convertible promissory note - related party
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— | — | ||||||||||||||||||||||||||
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Remeasurement of Class A ordinary shares to redemption amount as of September 30, 2023
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— | — | ( |
( |
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Net income
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— | — | — | — | — | |||||||||||||||||||||||
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Balance as of September 30, 2023
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$ | $ | $ | $ | ( |
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The accompanying notes are an integral part of the unaudited condensed financial statements.
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
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Class A Ordinary Shares
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Class B Ordinary Shares
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Shares
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Amount
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Shares
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Amount
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Additional
Paid-in Capital
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Accumulated Deficit
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Total
Shareholders’
Deficit
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Balance as of January 1, 2022
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$
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$
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$
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$
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(
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)
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$
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(
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)
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||||||||||||||
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Remeasurement of Class A ordinary shares to redemption amount as of March 31, 2022
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—
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—
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(
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(
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|||||||||||||||||||
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Net income
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—
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—
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—
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—
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—
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Balance as of March 31, 2022
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(
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(
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Remeasurement of Class A ordinary shares to redemption amount as of June 30, 2022
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—
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—
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(
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(
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Net income
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—
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—
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—
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—
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—
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|||||||||||||||||||||
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Balance as of June 30, 2022
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(
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(
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|||||||||||||||||||
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Remeasurement of Class A ordinary shares to redemption amount as of September 30, 2022
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— | — | ( |
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) | ||||||||||||||||||||||
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Net income
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— | — | — | — | — | |||||||||||||||||||||||
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Balance as of September 30, 2022
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$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
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Nine Months
Ended
September 30,
2023
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Nine Months
Ended
September 30,
2022
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Cash Flows from Operating Activities:
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Net income
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$
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$
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Adjustments to reconcile net income to net cash used in operating activities:
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Interest and dividend income on investments held in Trust Account
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(
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)
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(
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||||
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Change in fair value of warrant liability
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(
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Change in fair value of convertible promissory note - related party
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Changes in operating assets and liabilities:
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Prepaid expenses
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Accounts payable
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(
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Accounts payable - related party
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(
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)
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Accrued expenses and other current liabilities
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(
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)
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Accrued expenses - related party
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Net cash used in operating activities
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(
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)
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(
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)
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| Cash Flows from Investing Activities: |
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| Cash deposited into Trust Account |
( |
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| Cash withdrawn from Trust Account to pay redeeming shareholders |
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Net cash provided by investing activities
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| Cash Flows from Financing Activities: |
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| Proceeds from advance from Sponsor |
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| Repayment of advance from Sponsor |
( |
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| Proceeds from convertible promissory note - related party |
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| Payment of cash to redeeming shareholders |
( |
) | ||||||
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Net cash used in financing activities
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( |
) | ||||||
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Net Change in Cash
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(
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)
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(
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)
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||||
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Cash - Beginning of period
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||||||
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Cash - End of period
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$
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$
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||||
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Non-cash investing and financing activities
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||||||||
| Excess of cash received over fair value of convertible promissory note - related party |
$ | $ | ||||||
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Remeasurement of Class A ordinary shares subject to redemption to redemption value
|
$
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$
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|
||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
SEPTEMBER 30, 2023
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS AND LIQUIDITY
Alpha Partners Technology Merger Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on February 5, 2021. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company is not
limited to a particular industry or geographic region for purposes of consummating a 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 September 30, 2023, the Company had not commenced any operations. All activity for the
three and nine months ended September 30, 2023 and for the three and nine months ended September 30, 2022 relates to the search for a prospective initial Business Combination. The Company will not
generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company generates non-operating income in the form of interest and dividend income from the proceeds derived from the Initial Public
Offering. The Company has selected December 31 as its fiscal year end.
The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2021. On July 30, 2021, the Company consummated the Initial Public Offering of 25,000,000 units (the “Units”
and, with respect to the Class A ordinary shares included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $250,000,000 , which is discussed in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 800,000 units (the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to Alpha Partners Technology Merger Sponsor LLC (the “Sponsor”) and certain anchor investors (the “Anchor
Investors”), generating gross proceeds of $8,000,000 , which is described in Note 4.
The Company had granted the underwriters in the Initial Public Offering a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments, if any (see
Note 6). On August 5, 2021, the underwriters partially exercised the over-allotment option and purchased an additional 3,250,000 Units (the “Over-Allotment Units”), generating gross proceeds of $32,500,000 .
Simultaneously with the closing of the exercise of the over-allotment option, the Company consummated the sale of 65,000 units (the “Over-Allotment Private Placement Units”) at a purchase price of $10.00 per unit in a private placement to the Sponsor, generating gross proceeds of $650,000 .
Upon closing of the Initial Public Offering, the sale of the Private Placement Units, the sale of the Over-Allotment Units, and the sale of the Over-Allotment
Private Placement Units, a total of $282,500,000 was placed in a trust account (the “Trust
Account”) and was invested only in U.S. government treasury obligations with maturities 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, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the
funds held in the Trust Account, as described below.
The Company will provide the holders of its 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. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust
Account (initially $10.00 per Public 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). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
8
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ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
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The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the shares voted are voted in
favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its amended and restated memorandum and
articles of association (the “Amended and Restated Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with
the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem
shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed 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 approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares
irrespective of whether they vote for or against the proposed transaction or don’t vote at all.
Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer
rules, the Amended and Restated Memorandum and Articles of Association 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 redeeming its shares with respect to more than an aggregate of 15 % or more of the Public Shares, without the prior consent of the Company.
The Company’s Sponsor, officers and directors have agreed to waive (i) redemption rights with respect to their Founder Shares and Public Shares held by them in
connection with the completion of a Business Combination, (ii) redemption rights with respect to any Founder Shares and Public Shares held by them in connection with a shareholder vote to approve an amendment to the Amended and Restated
Memorandum and Articles of Association that would modify the substance or timing of the obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with an initial Business Combination or to
redeem 100 % of the Public Shares if the Company does not complete an initial Business Combination within 24 months from the closing of the Initial Public Offering or with respect to any other provision relating to the rights of holders of the Class A
ordinary shares or pre-initial Business Combination activity and (iii) rights to liquidating distributions from the Trust Account with respect to any Founder Shares held if the Company fails to complete an initial Business Combination within 24
months from the closing of the Initial Public Offering. However, if the Sponsor or officers and directors acquire Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions from the
Trust Account if the Company fails to complete a Business Combination within 24 months from the closing of the Initial Public Offering.
The Company previously had until 24 months from the closing of the Initial Public Offering to complete a Business Combination.
On July 27, 2023, the Company’s shareholders approved a proposal to amend the Company’s Amended and Restated Memorandum and Articles of Association (“the Amendment”) to extend the date by which the Company must consummate a Business Combination
from July 30, 2023 to July 30, 2024 (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as
promptly as reasonably possible, but not more than 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 the Company to pay the income taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares, which redemption will completely
extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There
will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period.
9
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ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
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 in 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 Initial Public Offering price per Unit ($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 partner business with which the Company has discussed entering into a transaction agreement, reduce the amounts 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 date of the liquidation of the Trust Account if
less than $10.00 per Public Share due to reductions in the value of the trust assets, in each case net of the interest that may be
withdrawn to pay tax obligations, provided that such liability will not apply to any claims by a third party or prospective partner business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any
claims under the indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). 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 (excluding the Company’s independent registered public accounting firm), prospective partner 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.
Previous Business Combination
In the Company’s Form 10-Q as of and for the period ended March 31, 2023, the Company had recorded a balance of $374,975 in the Receivable related to potential business combination line item on the condensed balance sheet. That balance represented an invoice issued to a potential
business combination company during the three months ended March 31, 2023 for transaction expenses and merger-related activities incurred through that date related to a prospective merger which was not completed. The Company determined that it
was entitled to that balance and as such, has recorded a resulting gain on the condensed statement of operations for the nine months ended September 30, 2023. The Company received payment of the invoice in April 2023.
Extraordinary General Meeting
On July 27, 2023, the Company held an Extraordinary General Meeting (the “Extraordinary General Meeting”)
whereby shareholders of the Company approved an amendment to the Company’s Amended and Restated Memorandum and Articles of Association in order to (i) extend the date by which the Company must consummate its initial business combination, cease
its operations and redeem all of its Class A ordinary shares (the “Extension Proposal”) to July 30, 2024, (ii) provide for the right of a holder of Class B ordinary shares of the Company to convert such Class B ordinary shares into Class A
ordinary shares on a one -for-one basis prior to the closing of a Business Combination at the election of the holder (the “Founder
Share Amendment Proposal”), and (iii) eliminate from the Charter the limitation that the Company shall not redeem Public Shares, including any shares issued in exchange thereof to the extent that such redemption would cause the Company’s net
tangible assets to be less than $5,000,001 (the “Redemption Limit” and, such proposal, the “Redemption Limitation Proposal”).
The Company filed the Charter Amendment with the Registrar of Companies in the Cayman Islands on July 28, 2023.
10
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
In connection with the Extension Proposal, the Founder Share Amendment Proposal and the Redemption Limitation
Proposal, the holders of 13,532,591 Class A ordinary shares, properly exercised their right to redeem their shares for cash at a
redemption price of approximately $10.41 per share, for an aggregate redemption amount of $140,838,808 . The payments for these redemptions took place on August 1, 2023, after which $153,169,659 remained in the Company’s Trust Account. As a result of the Extension Proposal being approved by the Company’s shareholders, the Sponsor, or its designee is required to make monthly payments to the
Company equal to the lesser of (a) an aggregate of $225,000 or (b) $0.03 per public share that remains outstanding and is not redeemed in connection with the Extension for each of the twelve (12) subsequent calendar months commencing on
July 30, 2023 to the earlier of the Termination Date as extended by the Extension Proposal and the consummation of an initial Business Combination, which amount will be deposited into the Trust Account. On August 2, 2023 and September 7, 2023,
$225,000 , or $450,000
in the aggregate, was deposited into the Company’s Trust Account as the first two of these payments. These payments will fund the Trust Account through July 30, 2024, the new date by which the Company must consummate its initial business
combination.
To cover these monthly payments and other associated operating expenses, a newly formed affiliate of the
Sponsor, APTM Sponsor Sub LLC, is providing an Extension Loan Facility (as defined in Note 5, the “Note”) to the Company in the principal sum of $1,500,000 ,
expected to be funded on an as-needed basis with the first draw on August 24, 2023. The principal balance shall be payable on the earlier of (i) the date on which the Company liquidates its Trust Account or (ii) the date on which the Company
consummates a Business Combination. If a Business Combination is not consummated, the Note will be repaid solely to the extent that the Company has funds available to it outside of its Trust Account, and all other amounts will be contributed to
capital, forfeited, eliminated, or otherwise forgiven or eliminated. Interest does not accrue on the related note. Officers and directors of the Company and their affiliated entities (the “Insiders”) have committed to fund up to the entire
amount of the Note. At the election of APTM Sponsor Sub LLC, some or all of the principal amount of the Note may be converted into Private Placement Units of the Company at a price of $10.00 per unit. APTM Sponsor Sub LLC will have no other recourse to the Sponsor or to the Company.
Letter of Intent
On July 26, 2023, the Company signed a non-binding letter-of-intent (“LOI”) for a business combination with
Glowforge Inc. (“Glowforge”), creator of award-winning 3D laser printers.
Under the terms of the LOI, the Company and Glowforge would become a combined entity, with Glowforge’s existing
equity holders rolling 100 % of their equity into the combined public company. The Company expects to announce additional details
regarding the proposed business combination upon the execution of a definitive merger agreement, which is expected to occur in the fourth quarter of 2023.
Liquidity and Going Concern
As of September 30, 2023, the Company had $259,009 in cash held outside of the Trust Account and a working capital deficit of $1,126,414 , which may not be sufficient for the Company to operate for at least the next 12 months from the issuance of these unaudited condensed financial statements. The
Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required under the Working Capital Loans (as defined in Note 5). There is no assurance that
the Company’s attempts to find a partner for an initial Business Combination will be successful or successful within the Combination Period or that the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors
will loan the Company funds as may be required under the Working Capital Loans (as defined in Note 5). In August 2023, the Company entered into a $1,500,000
Note (as defined in Note 5) with APTM Sponsor Sub LLC to help cover monthly Trust Account contributions and other working capital needs. There is no guarantee that these funds will be sufficient to support all of the Company’s working capital
needs.
11
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The Company will have until July 30, 2024 to complete a Business Combination. If a Business Combination is not consummated by
July 30, 2024 there will be a mandatory liquidation and subsequent dissolution of the Company.
In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Codification (“ASC”) Topic 205-40 Presentation of Financial Statements- Going Concern, management has determined the factors disclosed above including the July 30, 2024 Combination Period deadline raise substantial doubt about the Company’s
ability to continue as a going concern through one year from the date that these unaudited condensed financial statements are filed. These unaudited 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.
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have
a negative effect on the Company’s financial position, results of its operations, and/or search for a prospective partner company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements.
The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic
sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. In addition, the
Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in
third-party financing which may be unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations
and/or ability to consummate a Business Combination are not yet determinable. The unaudited condensed 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 accompanying unaudited condensed financial statements of the Company are presented in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to
the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In
the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and
cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Form 10-K as filed with the SEC on April 17, 2023. The interim results for
the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods.
12
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
Emerging Growth Company
The Company is an “emerging growth company,” 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 emerging growth companies 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. The Company has elected to implement the aforementioned exemptions.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial
accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to 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 emerging growth company, 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 unaudited condensed financial statements with another public company which is neither an emerging growth
company nor an emerging growth company 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 condensed financial statements in conformity with U.S. GAAP requires the Company’s 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 unaudited condensed financial statements and the reported amounts of 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 unaudited condensed 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 from those estimates. The initial valuation of the Public Warrants (as defined in Note 3) and Class A ordinary shares subject to redemption, the initial and the quarterly valuation of the Private Placement Warrants (as
defined in Note 4), and the valuations for the convertible Note (as defined in Note 5) required management to exercise significant judgement in its estimates.
Cash and Cash Equivalents
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 $259,009 and $726,869 in cash as of September 30, 2023 and December 31, 2022, respectively. The Company did no
Investments Held in Trust Account
Investments Held in Trust Account are classified as trading securities which are presented on the condensed balance sheets at fair value at the end of each reporting
period. At September 30, 2023 and December 31, 2022, the investments held in the Trust Account totaled $155,284,625 and $286,583,051 ,
respectively.
13
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
Convertible Promissory Note - Related Party
The Company accounts for the Working Capital Loan (as defined in Note 5) under ASC Topic 815, Derivatives and
Hedging (“ASC 815”). The Company has made the election under ASC 815-15-25 to account for the Working Capital Loan under the fair value option. Using the fair value option, the Working Capital Loan is required to be recorded at its initial fair
value on the date of issuance, and each balance sheet date thereafter. Differences between the proceeds from issuance of the Working Capital Loan and the fair value at issuance are recognized as either an expense in the condensed statements of
operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any changes in the estimated fair value of the Working Capital Loan are recognized as non-cash gains or losses in the condensed statements of
operations.
See Note 9 for additional information on inputs and valuation methods used to measure the convertible notes at
fair value.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and
applicable authoritative guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives
and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the
requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and
each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statements of operations. The initial fair value of the Public Warrants (as defined in Note 3) was
estimated using a binomial/lattice model and the fair value of the Founder Warrants (as defined in Note 5) and Private Placement Warrants (as defined in Note 4) was estimated using a Black-Scholes Option Pricing Model (see Note 9). Due to the
options pricing model not producing a meaningful volatility for the Founder Warrants and Private Placement Warrants as of September 30, 2023 and December 31, 2022, the
fair value of the Founder Warrants and Private Placement Warrants were set equal to the fair value of the Public Warrants.
Class A Ordinary Shares Subject to Possible Redemption
All of the 28,250,000 Class A ordinary shares sold as
part of the Units in the Initial Public Offering and subsequent partial exercise of the underwriters’ over-allotment option, that remain unredeemed, contain a redemption feature which allows for the redemption of such Public Shares in connection
with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Amended and Restated Memorandum and Articles of Association. In accordance
with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified
outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent equity. On July 27, 2023, 13,532,591 Class A ordinary shares were tendered for redemption by shareholders for a
total value of $140,838,808 . The payment of these shares took place on August 1, 2023, after which 14,717,409 Class A ordinary shares subject to possible redemption remained outstanding.
14
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption
value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
As of September 30, 2023 and December 31, 2022, the Class A ordinary shares subject to
possible redemption reflected in the condensed balance sheets are reconciled in the following table:
|
Class A ordinary shares subject to possible redemption as of December 31, 2022
|
$
|
|
||
|
Remeasurement of carrying value to redemption value as of March 31, 2023
|
|
|||
|
Class A ordinary shares subject to possible redemption as of March 31, 2023
|
|
|||
|
Remeasurement of carrying value to redemption value as of June 30, 2023
|
|
|||
|
Class A ordinary shares subject to possible redemption as of June 30, 2023
|
|
|||
| Redemption of Class A common stock subject to redemption | ( |
) | ||
| Remeasurement of carrying value to redemption value as of September 30, 2023 | ||||
| Class A ordinary shares subject to possible redemption as of September 30, 2023 | $ |
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of ASC Topic 340, Other Assets and Deferred Costs and SEC Staff Accounting Bulletin Topic 5A—Expenses of Offering. Offering costs consist principally of professional and registration fees incurred through the condensed balance sheet dates that are related to the Initial Public Offering. Offering costs directly
attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. For the period from
February 5, 2021 (inception) through December 31, 2021, the Company incurred offering costs amounting to $16,641,377 as a result of the
Initial Public Offering (consisting of $5,650,000 of underwriting fees, 9,887,500 of deferred underwriting fees, $136,679 of the costs connected to
the over-allotment option, and $967,198 of other offering costs).
The Company was reimbursed $1,169,000 by the
underwriters for offering costs associated with the Initial Public Offering. The Company recorded $14,937,225 of offering costs as a
reduction of temporary equity in connection with the redeemable Class A ordinary shares included in the Units. The Company immediately expensed $540,944
of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, Income Taxes (“ASC 740”). ASC 740 requires the recognition of
deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry
forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s unaudited condensed financial statements and prescribes a
recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Based on the Company’s evaluation, it has been
concluded that there are no significant uncertain tax positions requiring recognition in the Company’s unaudited condensed financial statements.
15
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no no
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Remeasurement
associated with the redeemable Class A ordinary shares is excluded from net income per share as the redemption value approximates fair value. Therefore, the income per share calculation allocates income shared pro rata between Class A and Class B
ordinary shares. As a result, the calculated net income per share is the same for Class A and Class B ordinary shares. The Company has not considered the effect of the Public Warrants (as defined in Note 3), Private Placement Warrants (as defined
in Note 4), the Founder Warrants (as defined in Note 5) to purchase an aggregate of 12,059,166 shares, or the effects of the 24,166
shares underlying the warrants that would be issuable upon conversion of the Working Capital Loan (as defined in Note 5) in the calculation of income per share, because the exercise of the warrants are contingent upon the occurrence of future
events. The 72,500 Private Placement Shares (as defined in Note 4) that would be issuable upon conversion of the Working Capital
Loan have been included in the calculation of diluted net income per ordinary share.
The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
|
Three Months Ended September 30, 2023
|
Three Months Ended September 30, 2022
|
Nine Months Ended September 30, 2023
|
Nine Months Ended September 30, 2022
|
|||||||||||||||||||||||||||||
|
Class A
|
Class B
|
Class A
|
Class B
|
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||||||||||||||
|
Basic net income per share:
|
||||||||||||||||||||||||||||||||
|
Numerator:
|
||||||||||||||||||||||||||||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Denominator:
|
||||||||||||||||||||||||||||||||
|
Basic weighted average shares outstanding
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Basic net income per share
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Diluted net income per share:
|
||||||||||||||||||||||||||||||||
|
Numerator:
|
||||||||||||||||||||||||||||||||
|
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
|
Denominator:
|
||||||||||||||||||||||||||||||||
|
Diluted weighted average shares outstanding
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Diluted net income per share
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
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 coverage 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.
16
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
Fair Value of Financial Instruments
The Company applies ASC Topic 820, Fair Value Measurement (“ASC 820”), which establishes a framework for measuring fair
value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most
advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the
reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on
the best information available in the circumstances.
The carrying amounts reflected in the condensed balance sheets for current assets and current liabilities approximate fair value due to their short-term nature.
Level 1 — Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such
as quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as
direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
Level 3 — Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists
for the assets or liabilities.
See Note 9 for additional information on assets and liabilities measured at fair value.
Recent Accounting Pronouncements
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect
on the accompanying unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
The registration statement for the Company’s Initial Public Offering was declared effective on July 27, 2021. On July 30, 2021, the Company completed its Initial Public Offering of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250,000,000 . Each Unit consists of one Class A ordinary share and of one redeemable warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one Class A ordinary share at an exercise price of $11.50 per whole share (see Note 7).
The Company had granted the underwriters in the Initial Public Offering a 45-day option to purchase up to 3,750,000 additional Units to cover
over-allotments, if any (see Note 6). On August 5, 2021, the underwriters partially exercised the over-allotment option and purchased an additional 3,250,000 Over-Allotment Units, generating gross proceeds of $32,500,000 .
17
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor and certain Anchor Investors purchased an aggregate of 800,000 Units at a price of $10.00 per Private Placement Unit ($8,000,000 in the
aggregate). Each Private Placement Unit consists of one Class A ordinary share (the “Private
Placement Shares”) and of one redeemable warrant (the “Private Placement Warrants”), which is exercisable at a price of $11.50 per share. A portion of the proceeds from the Private Placement Units were added to the net proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not
complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private
Placement Warrants will expire worthless. There will be no redemption rights or liquidating distributions from the Trust Account with respect to the Private Placement Warrants.
Simultaneously with the closing of the exercise of the over-allotment option (see Note 6), the Company consummated the sale of 65,000 Over-Allotment Private Placement Units at a purchase price of $10.00 per unit in a private placement to the Sponsor, generating gross proceeds of $650,000 .
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On February 5, 2021, an affiliate of the Sponsor paid an aggregate of $25,000 to cover certain expenses on behalf of the Company in exchange for the issuance of 7,187,500 founder units (“Founder Units”), which were subsequently transferred to the Sponsor. Each Founder Unit consists of one Class B ordinary share and of one warrant (the
“Founder Warrants”) that has the same terms as the Private Placement Warrants (2,395,833 Founder Warrants in the aggregate). The Class
B ordinary shares included in the Founder Units (“Founder Shares”) included an aggregate of up to 937,500 Class B ordinary shares
subject to forfeiture to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that the Sponsor will own, on an as-converted basis, 20 % of the Company’s issued and outstanding shares upon completion of the Initial Public Offering. The Founder Warrants included an aggregate of up to 312,500 Founder Warrants subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised. On August 5, the
underwriters partially exercised the over-allotment option to purchase an additional 3,250,000 Units (see Note 6), leaving 125,000 Class B ordinary shares and 41,667
Founder Warrants subject to forfeiture. On September 11, 2021, the remaining option expired. As a result, 125,000 Class B ordinary
shares and 41,667 Founder Warrants were forfeited.
The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell (i) any of their Founder Units or Founder Shares until the earliest of
(A) one year after the completion of an initial Business Combination and (B) subsequent to an initial Business Combination, (x) if the
closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share
capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150
days after an initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to
exchange their ordinary shares for cash, securities or other property and (ii) any of their Founder Warrants and Class A ordinary shares issued upon conversion or exercise thereof until 30 days after the completion of an initial Business Combination. Notwithstanding the foregoing, if the closing price of the Company’s Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading
day period commencing at least 150 days after an initial Business Combination, the Founder Units or Founder Shares will be released
from the lock-up.
18
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
Administrative Support Agreement
The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay an affiliate of the Sponsor $55,000
per month for office space, secretarial and administrative support services. Upon the completion of an initial Business Combination or liquidation, the Company will cease paying these monthly fees. For the
three and nine months ended September 30, 2023, the Company incurred expenses of $165,000 and $495,000 , respectively, under this agreement. For the three and nine months ended September 30, 2022, the
Company incurred expenses of $165,000 and $495,000 , respectively. As of September 30, 2023, the Company had an outstanding balance of $55,000
included in accrued expenses - related party on the condensed balance sheets. There was no outstanding balance as of December 31,
2022.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and
officers may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans. In the event that a Business
Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the
foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. Up to $1,500,000
of such loans may be convertible into units of the post-Business Combination entity at a price of $10.00
per unit at the option of the lender. The units would be identical to the Private Placement Units.
On August 15, 2023,
the Company entered into a Working Capital Loan with APTM Sponsor Sub LLC (the “Affiliate”), in the principal sum of $1,500,000 ,
expected to be funded on an as-needed basis. The principal balance shall be payable on the earlier of (i) the date on which the Company liquidates its Trust Account or (ii) the date on which the Company consummates a Business Combination. If a
Business Combination is not consummated, the Working Capital Loan will be repaid solely to the extent that the Company has funds available to it outside of its Trust Account, and all other amounts will be contributed to capital, forfeited,
eliminated, or otherwise forgiven or eliminated. Interest does not accrue on the Working Capital Loan. Officers and directors of the Company and their affiliated entities (the “Insiders”) have committed to fund up to the entire amount of the
Working Capital Loan. At the election of the Affiliate, some or all of the principal amount of the Working Capital Loan may be converted into Private Placement Units of the Company at a price of $10.00 per unit. The Affiliate will have no other recourse to the Sponsor or to the Company. On August 24, 2023, September 6, 2023, September 28, 2023, and September 29,
2023, the Company withdrew $150,000 , $225,000 ,
$124,874 , and $225,126 ,
respectively, from the Working Capital Loan, which have not yet been repaid as of September 30, 2023. As of September 30, 2023, the principal amount outstanding under the Working Capital Loan was $725,000 .
The fair value
option was elected (see Note 9) and, as such, the fair value of the Working Capital Loan of $154,200 is shown on the condensed
balance sheets as of September 30, 2023. The fair value of the Working Capital Loan upon issuance was $152,341 .
Reimbursements—Related Party
For the three and nine months ended September 30, 2023, the Company paid $3,568 and $17,574 ,
respectively, to the Sponsor as reimbursements for operating costs of the Company paid for by the Sponsor. For the three and nine months ended September 30, 2022, the Company paid $17,403 and $34,212 , respectively, to the Sponsor as reimbursements.
Accounts Payable - Related Party
As of September 30, 2023 and December 31, 2022, $30,442 and $15,377 ,
respectively, was payable by the Company to the Sponsor for services related to the search for an initial Business Combination target.
Advance from Sponsor
On July 27, 2023
and August 8, 2023, the Company received a $3,000
19
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
NOTE 6. COMMITMENTS
Registration and Shareholder Rights Agreement
The holders of the Founder Units, Private Placement Units, warrants underlying the Founder Units and Private Placement Units and units that may be issued upon
conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the warrants underlying the Founder Units and Private Placement Units and units issued upon conversion of the Working Capital Loans) have
registration and shareholder rights to require the Company to register a sale of any of its securities held by them pursuant to a registration and shareholder rights agreement entered into on the effective date of the Initial Public Offering. The
holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such
securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of an initial Business Combination. The Company will bear the expenses incurred in
connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45 -day option
to purchase up to 3,750,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting
discounts and commissions. On August 5, 2021, the underwriters partially exercised the over-allotment option to purchase an additional 3,250,000 Units at an offering price of $10.00 per Unit for an
aggregate purchase price of $32,500,000 . On September 11, 2021, the remaining option expired. As
a result, 125,000 Class B ordinary shares were forfeited.
The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $5,650,000
in the aggregate, upon the closing of the Initial Public Offering and partial exercise of the over-allotment option. In addition, $0.35 per unit, or $9,887,500 in the aggregate will be
payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject
to the terms of the underwriting agreement.
NOTE 7. WARRANTS
As of September 30, 2023 and December 31, 2022, there were 2,354,166 288,334 9,416,666 11.50 .
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,
Private Placement Warrants, and Founder Warrants will become exercisable 30 days five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Founder Warrants and the Private Placement Warrants will also expire five years after the completion 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 warrant and will have no obligation to settle such warrant
exercise unless a registration statement under the Securities Act with respect to the Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to satisfying the obligations described
below with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable and the Company will not be obligated to issue a Class A ordinary share upon exercise of a warrant unless the Class A ordinary
share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.
20
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of an initial Business Combination, the Company will use the commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement or a
new registration statement covering the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use the commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of an initial Business Combination, and to maintain the effectiveness of such registration statement and a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a
national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a
“cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so appoint, the Company will not be required to file or maintain in effect a registration statement. If a registration statement covering the
Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60 th day after the closing of an initial
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, but the Company will use the best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00 —Once the warrants become exercisable, the Company may call the warrants for redemption (except with respect to the Private Placement Warrants):
| • |
in whole and not in part;
|
| • |
at a price of $
|
| • |
upon not less than
|
| • |
if, and only if, the last reported closing price of the Class A ordinary shares for any
|
The Company will not redeem the warrants as described above unless a 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 shares is available throughout the 30 -day
redemption period. If and when the warrants become redeemable by the Company, the Company may exercise the 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 outstanding warrants:
| • |
in whole and not in part;
|
| • |
at $
|
21
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
| • |
if, and only if, the Reference Value equals or exceeds $
|
The value of the Company’s Class A ordinary shares shall mean the volume weighted average price of the Class A ordinary shares during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide its
warrant holders with the final fair market value no later than after the 10 -trading day period described above ends. In no event will the warrants be exercisable on a cashless basis in connection with this redemption feature for more than 0.361 Class A ordinary shares per warrant (subject to adjustment).
In addition, if (x) the Company issues additional Class A ordinary shares or equity linked securities for capital raising purposes in connection with the closing of
an initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such
issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the initial shareholders or their affiliates, without taking into account any Founder Shares held by the
initial shareholders or such affiliates, as applicable, prior to such issuance including any transfer or reissuance of such shares (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 an initial Business Combination, and (z) the volume-weighted
average trading price of the Class A ordinary shares during the 10 trading day period starting on the trading day after the day on
which the Company consummates an initial Business Combination is below $9.20 per share, the exercise price of the warrants will be
adjusted (to the nearest cent) to be equal to 115 10.00 and $18.00 per share redemption
trigger prices adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00 .” and “Redemption
of warrants when the price per Class A ordinary share equals or exceeds $18.00 .” will be adjusted (to the nearest cent) to be equal to
100 % and 180 % of the
higher of the Market Value and the Newly Issued Price, respectively.
The Private Placement Units (including the Private Placement Shares, the Private Placement Warrants and Class A ordinary shares issuable upon exercise of such
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 be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement
Units 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.
The Company accounts for the 9,705,000 warrants
issued in connection with the Initial Public Offering (including 9,416,666 Public Warrants and 288,334 Private Placement Warrants) and the 2,354,166
Founder Warrants 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. The Founder
Warrants and Private Placement Warrants are precluded from equity classification due to a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. The Public Warrants
are precluded from equity classification due to a provision that in the event of a tender offer or exchange offer made to and accepted by holders of more than 65 % of the outstanding ordinary shares, all holders of the warrants would be entitled to receive cash for their warrants.
22
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The accounting treatment of derivative financial instruments required that the Company record the warrants as derivative liabilities at fair value at issuance. The
Public Warrants were allocated a portion of the proceeds from the issuance of the Units in the Initial Public Offering equal to its fair value. The Private Placement Warrants were allocated a portion of the proceeds from the issuance of the
Private Placement Units equal to its fair value. The warrant liabilities are subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liabilities are adjusted to current fair value, with the change in fair
value recognized in the Company’s condensed statements of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be
reclassified as of the date of the event that causes the reclassification.
NOTE 8. SHAREHOLDERS’ DEFICIT
Preference shares — The
Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s
board of directors. As of September 30, 2023 and December 31, 2022, there were no
Class A ordinary shares — The Company is authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of Class A ordinary shares are entitled to one vote for each share. As of September 30, 2023 and December 31, 2022, there were 15,582,409 29,115,000 14,717,409 28,250,000
Class B ordinary shares — The
Company is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders of Class B ordinary shares are entitled to one vote for each share. As of September 30, 2023 and December 31, 2022, there were 7,062,500
Ordinary shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of
Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Prior to an initial Business Combination, only holders
of the Founder Shares will have the right to vote on the election of directors. Holders of the Public Shares will not be entitled to vote on the appointment of directors during such time.
The Class B ordinary shares will automatically convert into Class A ordinary shares on the first business day following the consummation of an initial Business
Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20 % of the sum of (i) the total number of ordinary shares issued and outstanding, plus (ii) the sum of the total number of Class A ordinary shares issued or deemed issued or issuable upon
conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of an initial Business Combination, 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 an initial Business Combination and any Private Placement Warrants issued to the Sponsor, members of the
team or any of their affiliates upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.
23
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
NOTE 9. FAIR VALUE MEASUREMENTS
The following tables present information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
Description
|
Amount at
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
September 30, 2023
|
||||||||||||||||
|
Assets
|
||||||||||||||||
|
Investments held in Trust Account:
|
||||||||||||||||
|
Money Market investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Liabilities
|
||||||||||||||||
|
Warrant liability – Founder Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Warrant liability – Private Placement Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Warrant liability – Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Convertible promissory note - related party
|
$ |
$ |
$ |
$ |
||||||||||||
|
December 31, 2022
|
||||||||||||||||
|
Assets
|
||||||||||||||||
|
Investments held in Trust Account:
|
||||||||||||||||
|
Money Market investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Liabilities
|
||||||||||||||||
|
Warrant liability – Founder Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Warrant liability – Private Placement
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Warrant liability – Public Warrants
|
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Transfers to/from
Levels 1, 2 and 3 are recognized at the end of the reporting period. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement in September 2021 after the Public Warrants were
separately listed and traded. The estimated fair value of the Founder Warrants, and Private Placement Warrants transferred from a Level 3 fair value measurement to a Level 2 fair value measurement in the fourth quarter of 2022 due to the use of
an observable market quote for a similar asset using recent trading prices. The estimated fair value of the Public Warrants transferred from a Level 1 measurement to a Level 2 measurement in September 2023 due to limited trading activity during
the three months ended September 30, 2023.
The Company
utilized a binomial/lattice model for the initial valuation of the Public Warrants. The measurement of the Public Warrants as of September 30, 2023 is classified as Level 2 due to limited trading activity under the ticker APTMW during the
three months ended September 30, 2023. The measurement of the Public Warrants as of December 31, 2022 is classified as Level 1 due to the use of an observable market quote in an active market under the ticker APTMW. The quoted price of the
Public Warrants was $0.06 and $0.04
per warrant as of September 30, 2023 and December 31, 2022, respectively.
In prior periods, Company utilized a Black-Scholes Option Pricing model for the initial valuation of the Founder Warrants and Private Placement Warrants and the
subsequent measurement of the Founder Warrants and Private Placement Warrants. Inherent in pricing models are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield, which are considered
Level 3 inputs. However, since a reasonable and acceptable volatility cannot be inferred from the option pricing model performed for the Founder Warrants and Private Placement Warrants as of September 30, 2023
and December 31, 2022, the fair value of the Founder Warrants and Private Placement Warrants were set equal to the fair value of the Public Warrants. The fair value of the Founder Warrants and Private Placement Warrants was $0.06 0.04
24
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
The Working Capital Loan was valued using a combination
of Black-Scholes and Discounted Cash Flows methods, which is considered to be a Level 3 fair value measurement. The estimated fair values of the Working Capital Loan were based on the following significant inputs:
|
As of August
15, 2023
(Initial
Measurement)
|
As of September
30, 2023
(Initial
Measurement)
|
As of
September 30,
2023
|
||||||||||
|
Unit price
|
$ | $ | $ | |||||||||
|
Strike price
|
$ | $ | $ | |||||||||
|
Expected term
|
||||||||||||
|
Unit volatility
|
% | % | % | |||||||||
|
Risk free rate
|
% | % | % | |||||||||
|
Discount rate
|
% | % | % | |||||||||
|
Probability of completing an Initial Business Combination
|
% | % | % | |||||||||
|
Fair value convertible promissory note - related party
|
$ | $ | $ | |||||||||
The following table provides a summary of the changes in the fair value of the Company’s Level 3 financial instruments that are measured at fair value on a recurring
basis:
|
Fair value as of December 31, 2021
|
$
|
|
||
|
Change in fair value of Private Placement Warrants and Founder Warrants
|
(
|
)
|
||
|
Fair value as of March 31, 2022
|
|
|||
|
Change in fair value of Private Placement Warrants and Founder Warrants
|
(
|
)
|
||
|
Fair value as of June 30, 2022
|
|
|||
|
Change in fair value of Private Placement Warrants and Founder Warrants
|
(
|
)
|
||
|
Fair value as of September 30, 2022
|
|
|||
|
Change in fair value of Private Placement Warrants and Founder Warrants
|
(
|
)
|
||
|
Transfer of Private Warrants, and Founder Warrants to Level 2 measurement
|
(
|
)
|
||
|
Fair value as of December 31, 2022
|
|
|||
| Initial value of draw on convertible promissory note - related party on August 30, 2023 |
||||
| Initial value of draw on convertible promissory note - related party on September 30, 2023 |
||||
| Change in fair value of Convertible promissory note - related party |
||||
| Fair value as of September 30, 2023 |
$ |
The Company
recognized a loss in connection with the change in the fair value of warrant liabilities of $241,183 67,741 for the three months ended September 30, 2022. The Company recognized a gain in connection with the change in the fair value of warrant liabilities of $6,949,642 in the condensed statements of operations for the nine months ended September 30, 2022. The Company recognized a loss in connection with
the change in the fair value of the Working Capital Loan of $1,859
25
|
ALPHA PARTNERS TECHNOLOGY MERGER CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2023
|
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the unaudited condensed financial
statements were issued. The Company did not identify any subsequent events that 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 in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Alpha Partners Technology Merger Corp. References to our “management” or our
“management team” refer to our officers and directors, and references to the “Sponsor” refer to Alpha Partners Technology Merger Sponsor LLC. The following discussion and analysis of the Company’s financial
condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set
forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” 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 Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the
Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and
similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could
cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the U.S.
Securities and Exchange Commission (the “SEC”) on April 17, 2023. 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 on February 5, 2021 as a Cayman Island exempted company and formed for the purpose of effectuating a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses, which we refer to throughout this Quarterly Report as our “initial business combination”. We intend to effectuate our initial business
combination using cash from the proceeds of the initial public offering (the “Initial Public Offering”) and the private placement of the Private Placement Units (as defined below), the proceeds of the sale of our shares in connection with our
initial business combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering or otherwise), shares issued to the owners of the target, debt issued to bank
or other lenders or the owners of the target, or a combination of the foregoing.
On July 30, 2021, we consummated our IPO of 25,000,000 Units, at $10.00 per Unit, generating gross proceeds of $250.0 million, and incurring offering costs of approximately $13.75 million, of which $8.75 million was
for deferred underwriting commissions. We granted the underwriter a 45-day option to purchase up to an additional 3,750,000 Units at the IPO price to cover over-allotments, if any. On August 3, 2021, the underwriters partially exercised the
over-allotment option, and the closing of the issuance and sale of the additional 3,250,000 Over-Allotment Units occurred on August 5, 2021. The issuance by the Company of the Over-Allotment Units at a price of $10.00 per unit resulted in total
gross proceeds of approximately $32.5 million.
Simultaneously with the closing of the IPO, we consummated the Private Placement of 800,000 units, at a price of $10.00 per Private Placement Unit with the Sponsor, generating gross proceeds of $8.0 million.
Simultaneously with the issuance and sale of the Over-Allotment Units, the Company consummated the Private Placement with the Sponsor of 65,000 Additional Private Placement Units, generating total proceeds of $650,000.
Upon the closing of the IPO and the Private Placement, approximately $250.0 million ($10.00 per Unit) of the net proceeds of the IPO and certain of the proceeds of the Private Placement were placed in a Trust
Account, located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act,
having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invests only in direct U.S. government treasury obligations, as determined by us, until the
earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below. In addition, a certain anchor investor advanced an aggregate amount of approximately $500,681 to the Company to cover the
purchase of Private Placement Units. In April 2021, the Company repaid $681 to the anchor investor. Upon the closing of the IPO, the remaining advance of $500,000 was applied to the purchase of the Private Placement Units which the Company has
since repaid.
Our management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of Private Placement Units, although substantially all of the net proceeds are intended to be
applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully.
We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes
payable on the interest earned on the Trust Account) at the time of the signing of the agreement to enter into the initial Business Combination. However, we will only complete a Business Combination if the post-transaction company owns or acquires
50% or more of the outstanding voting securities of the prospective partner company or otherwise acquires a controlling interest in the prospective party company sufficient for it not to be required to register as an investment company under the
Investment Company Act.
If we are unable to complete a Business Combination within the Combination Period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten
business days thereafter, redeem the Public Shares, at 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 our income taxes, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as
shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors,
liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to our warrants, which will expire worthless if we fail to consummate a Business Combination within the Combination Period.
As of September 30, 2023 and December 31, 2022, we held cash of $259,009 and $726,869, respectively, current liabilities of $1,428,807 and
$1,268,564, respectively, and deferred underwriting compensation of $9,887,500. Further, we expect to continue to incur significant costs in the pursuit of our initial business combination. We cannot assure you that our plans to complete an initial
business combination will be successful.
Previous Business Combination
In our Form 10-Q as of and for the period ended March 31, 2023, we had recorded a balance of $374,975 in the Receivable related to potential business combination line item on the condensed balance sheet. That balance
represented an invoice issued to a potential business combination company during the Three Months Ended March 31, 2023 for transaction expenses and merger-related activities incurred through that date related to a prospective merger which was not
completed. We determined that we were entitled to that balance and as such, have recorded a resulting gain on the condensed statement of operations for the Nine Months Ended September 30, 2023. We received payment of the invoice in April 2023.
Extraordinary General Meeting
On July 27, 2023, we held an Extraordinary General Meeting (the "Extraordinary General Meeting") whereby our shareholders approved an amendment to our amended and restated memorandum and articles of association (the
"Amendment") in order to (i) extend the date by which we must consummate our initial business combination, cease our operations and redeem all of our Class A ordinary shares (the "Extension Proposal") to July 30, 2024, (ii) provide for the right of
a holder of our Class B ordinary shares to convert such Class B ordinary shares into Class A ordinary shares on a one-for-one basis prior to the closing of a Business Combination at the election of the holder (the "Founder Share Amendment
Proposal"), and (iii) eliminate from the amended and restated memorandum and articles of association the limitation that we shall not redeem Public Shares, including any shares issued in exchange thereof to the extent that such redemption would
cause our net tangible assets to be less than $5,000,001 (the "Redemption Limit" and, such proposal, the "Redemption Limitation Proposal").
We filed the Amendment with the Registrar of Companies in the Cayman Islands on July 28, 2023.
In connection with the Extension Proposal, the Founder Share Amendment Proposal and the Redemption Limitation Proposal, the holders of 13,532,591 Class A ordinary shares, properly exercised their right to redeem
their shares for cash at a redemption price of approximately $10.41 per share, for an aggregate redemption amount of $140,838,808. After the redemptions, $153,169,659 remained in our Trust Account. As a result of the Extension Proposal being
approved by our shareholders, the Sponsor, or its designee is required to make monthly payments to us equal to the lesser of (a) an aggregate of $225,000 or (b) $0.03 per public share that remains outstanding and is not redeemed in connection with
the Extension for each of the twelve (12) subsequent calendar months commencing on July 30, 2023 to the earlier of the Termination Date as extended by the Extension Proposal and the consummation of an initial Business Combination, which amount will
be deposited into the Trust Account. On August 2, 2023 and September 7, 2023, $225,000 was deposited into the Company’s Trust Account as the first two of these payments.
To cover these monthly payments and other associated operating expenses, a newly formed affiliate of the Sponsor, APTM Sponsor Sub LLC, is providing an Extension Loan Facility (as defined in Note 5, the “Working
Capital Loan”) to us in the principal sum of $1,500,000, expected to be funded on an as-needed basis with the first draw on August 24, 2023. The principal balance shall be payable on the earlier of (i) the date on which we liquidate our Trust
Account or (ii) the date on which we consummate a Business Combination. If a Business Combination is not consummated, the Working Capital Loan will be repaid solely to the extent that we have funds available to us outside of our Trust Account, and
all other amounts will be contributed to capital, forfeited, eliminated, or otherwise forgiven or eliminated. Interest does not accrue on the Working Capital Loan. Officers and directors of the Company and their affiliated entities (the “Insiders”)
have committed to fund up to the entire amount of the Working Capital Loan. At the election of APTM Sponsor Sub LLC, some or all of the principal amount of the Working Capital Loan may be converted into Private Placement Units of the Company at a
price of $10.00 per unit. APTM Sponsor Sub LLC will have no other recourse to the Sponsor or to us.
Letter of Intent
On July 26, 2023, we signed a non-binding letter-of-intent (“LOI”) for a business combination with Glowforge Inc. (“Glowforge”), creator of award-winning 3D laser printers.
Under the terms of the LOI, we would become a combined entity with Glowforge, with Glowforge’s existing equity holders rolling 100% of their equity into the combined public company. We expect to announce additional
details regarding the proposed business combination upon the execution of a definitive merger agreement, which is expected in the fourth quarter of 2023.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues to date. Our only activities for the three and nine months ended September 30, 2023 and 2022 were
organizational activities and identifying a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our initial business combination. We will generate non-operating income in the
form of interest and dividend income on cash and investments held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due
diligence expenses.
For the three months ended September 30, 2023, we recorded net income of $1,883,025, which resulted from interest and dividend income on investments held in the Trust Account in
the amount of $2,596,438 and interest income on the bank account of $28, partially offset by operating and formation costs of $470,399,
a loss on fair value of warrant liability of $241,183, and a loss on change in fair value of convertible
promissory note - related party of $1,859.
For the three months ended September 30, 2022, we recorded net income of $542,884, which resulted from a loss on fair value of warrant liability of $67,741 and interest and dividend income on investments held in the
Trust Account in the amount of $1,275,127, offset by operating and formation costs of $664,502.
For the nine months ended September 30, 2023 we recorded net income of $7,947,874, which resulted from interest and dividend income on investments held in the Trust Account of $9,090,382, a gain on receivable related to potential business combination of $374,975, and interest income on the bank
account of $652, partially offset by operating and formation costs of $1,275,093, a loss on fair value of warrant liability of $241,183,
and a loss on change in fair value of convertible promissory note - related party of $1,859.
For the nine months ended September 30, 2022, we recorded net income of $6,769,548, which resulted from a gain on fair value of warrant liability of $6,949,642 and
interest and dividend income on investments held in the Trust Account in the amount of $1,684,938, offset by operating and formation costs of $1,865,032.
Liquidity, Going Concern and Capital Resources
For the nine months ended September 30, 2023, net cash used in operating activities was $742,860, which was due to interest and dividend
income on the investments held in the Trust Account of $9,090,382, offset by net income of $7,947,874, the change in fair value of the warrant liability of $241,183, the change in fair value of the convertible promissory note - related party of $1,859, and changes in working capital of $156,606.
For the nine months ended September 30, 2022, net cash used in operating activities was $1,120,106, which was due to the change in fair value of the warrant liability of $6,949,642 and interest and dividend income on
the investments held in the Trust Account of $1,684,938, partially offset by net income of $7,947,874 and changes in working capital of $744,926.
For the nine months ended September 30, 2023, net cash provided by investing activities was $140,388,808, which was due to cash withdrawn
from the Trust Account to pay redeeming shareholders of $140,838,808, offset by cash deposited into the Trust Account of $450,000
There were no cash flows from investing activities for the nine months ended September 30, 2022.
For the nine months ended September 30, 2023, net cash used in financing activities was $140,113,808, which was due to payments of cash to
redeeming shareholders of $140,838,808, offset by proceeds from the convertible promissory note - related party of $725,000.
There were no cash flows from financing activities for the nine months ended September 30, 2022.
As of September 30, 2023 and December 31, 2022, we had cash of $259,009 and $726,869 held outside the
Trust Account. We will use these funds to primarily identify and evaluate prospective partner businesses, perform business due diligence on prospective partner businesses, travel to and from the offices, plants or similar locations of prospective
partner businesses or their representatives or owners, review corporate documents and material agreements of prospective partner businesses, and structure, negotiate and complete a business combination.
We intend to use substantially all of the remaining funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions),
to complete our initial business combination. We may withdraw interest income (if any) to pay income taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust
Account. We expect the interest income earned on the amount in the Trust Account (if any) will be sufficient to pay our income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial
business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the prospective partner, make other acquisitions and pursue our growth strategies.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and
directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts. In the event that our initial business combination does not close, we may use a portion of
the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units of the post-business combination
company at a price of $10.00 per unit at the option of the lender. The units would be identical to the Private Placement Units. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our Sponsor, members of our management team or any of their affiliates as we do not believe third parties will be willing to loan
such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
We have incurred and expect to continue to incur significant costs in pursuit of our initial business combination. As such, we may have insufficient funds available to operate our business through one year from the
date that these unaudited condensed financial statements are filed, if we do not complete a business combination prior to such date. Moreover, we may need to obtain additional financing either to complete our business combination or because we
become obligated to redeem a significant number of Public Shares upon completion of our business combination, in which case we may issue additional securities or incur debt in connection with such business combination. In addition, we intend to
target businesses larger than we could acquire with the net proceeds of our IPO and the sale of the private placement warrants and may as a result be required to seek additional financing to complete such proposed initial business combination.
Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our business combination. If we are unable to complete our initial business combination because we do not have
sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet
our obligations.
As of September 30, 2023, we had $259,009 in cash held outside of the Trust Account and a working capital deficit
of $1,126,141, which may not be sufficient for us to operate for at least the next 12 months from the issuance of these unaudited condensed financial statements. The Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and
directors may, but are not obligated to, loan us funds as may be required under the Working Capital Loans (as defined in Note 5). There is no assurance that our attempts to find a partner for an initial Business Combination will be successful or
successful within the Combination Period or that the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors will loan the Company funds as may be required under the Working Capital Loans (as defined in Note 5 of
the accompanying unaudited condensed financial statements). In August 2023, we entered into a $1,500,000 Working Capital Loan (as defined in Note 5) with APTM Sponsor Sub LLC to help cover monthly Trust Account
contributions and other working capital needs. There is no guarantee that these funds will be sufficient to support all of our working capital needs.
The Company will have until July 30, 2024 to complete a Business Combination. If a Business Combination is not consummated by July 30, 2024 there will be a mandatory liquidation and subsequent dissolution of the
Company.
In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Codification (“ASC”) Topic 205-40 Presentation of
Financial Statements- Going Concern, management has determined the factors disclosed above including the July 30, 2024 Combination Period deadline raise substantial doubt about the Company’s ability to continue as a going concern through
one year from the date that these unaudited condensed financial statements are filed. These unaudited 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.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of September 30, 2023 or December 31, 2022.
Contractual Obligations
Underwriting Agreement
We granted the underwriters a 45-day option to purchase up to 3,750,000 additional Units to cover over-allotments at the IPO price, less the underwriting discounts and
commissions. On August 5, 2021, the underwriters partially exercised the over-allotment option to purchase an additional 3,250,000 Units at an offering price of $10.00 per
Unit for an aggregate purchase price of $32,500,000. On September 11, 2021, the remaining option expired.
The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $5,650,000 in the aggregate, upon the closing of the IPO and
partial exercise of the over-allotment option. In addition, $0.35 per unit, or $9,887,500 in the aggregate will be payable to the underwriters for deferred underwriting
commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual results
could materially differ from those estimates. We have identified the following critical accounting policies:
Net Income Per Ordinary Share
Net income per ordinary share is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Accretion associated with the redeemable Class A ordinary shares is
excluded from net income per share as the redemption value approximates fair value. Therefore, the income per share calculation allocates income shared pro rata between Class A and Class B ordinary shares. As a result, the calculated net income per
share is the same for Class A and Class B ordinary shares. We have not considered the effect of the warrants sold in the IPO, Private Placement, warrants included in the founder units issued to our Sponsor to purchase an aggregate of 12,059,166 shares, or the effects of the 24,166 warrants that would be issuable upon conversion of the Working Capital Loan (as defined in Note 5) in the calculation of diluted income per share, because the exercise
of the warrants are contingent upon the occurrence of future events. The Private Placement Shares (as defined in Note 4) that may be issued upon conversion of the Working Capital Loan are issuable at the option of the holder.
Class A Ordinary Shares Subject to Possible Redemption
All of the 28,250,000 Class A ordinary shares sold as part of the units in the IPO contain a redemption feature which allows for the redemption of such Public Shares in connection with our liquidation, if there is a
shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC and its staff’s guidance on
redeemable equity instruments, which has been codified in Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”), redemption provisions not solely within our
control require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Public Shares have been classified outside of permanent equity. On July 27, 2023, 13,532,591 Class A
ordinary shares were tendered for redemption by shareholders for a total value of $140,838,808. The payment of these shares took place on August 1, 2023, after which 14,717,409 Class A ordinary shares subject to possible redemption remained
outstanding.
We recognize changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or
decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
Convertible Promissory Note - Related Party
We account for the Working Capital Loan (as defined in Note 5) under ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). We have made the election under ASC 815-15-25 to account for the Working Capital Loan under
the fair value option. Using the fair value option, the Working Capital Loan is required to be recorded at its initial fair value on the date of issuance, and each balance sheet thereafter. Differences between the proceeds from issuance of the
Working Capital Loan and the fair value at issuance are recognized as either an expense in the condensed statements of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any changes in the estimated fair
value of the Working Capital Loan are recognized as non-cash gains or losses in the condensed statements of operations. As of September 30, 2023, the principal amount outstanding under the Working Capital Loan
was $725,000.
The fair value of the Working Capital Loan of $154,200 is shown on the condensed balance sheets as of September 30, 2023. The fair value of the Working Capital Loan upon issuance was $152,341.
See Note 9 for the valuation methodology and significant inputs used to estimate the fair value.
Warrant Liabilities
We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether
the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or
modified warrants that do not meet all the criteria for equity classification, the warrants 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 the warrants are recognized as a non-cash gain or loss on the condensed statements of operations. The initial fair value of the Public Warrants (as defined in Note 3) was estimated using a binomial/lattice model and the initial and subsequent
fair value of the Founder Warrants (as defined in Note 5) and Private Placement Warrants (as defined in Note 4) was estimated using a Black-Scholes Option Pricing Model (see Note 9). Due to the options pricing model not producing a meaningful
volatility for the Founder Warrants and Private Placement Warrants as of September 30, 2023 and December 31, 2022, the fair value of the Founder Warrants and Private
Placement Warrants were set equal to the fair value of the Public Warrants.
Recent Accounting Standards
Our management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk.
|
This item is not applicable as we are a smaller reporting company.
| Item 4. |
Controls and Procedures.
|
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under Securities Exchange Act of 1934, as
amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure
that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of September 30, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules
13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
| ITEM 1. |
LEGAL PROCEEDINGS
|
None.
| ITEM 1A. |
RISK FACTORS
|
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 17, 2023. Any of these factors
could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of
operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
None.
| 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.
|
Exhibit No.
|
Description
|
|
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
101.INS*
|
XBRL Instance Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
104*
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
|
*
|
Filed herewith.
|
|
**
|
Furnished.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Alpha Partners Technology Merger Corp.
|
||
|
Date: November 17, 2023
|
By:
|
/s/ Matthew R. Krna
|
|
Matthew R. Krna
|
||
|
Chief Executive Officer
|
||
|
Alpha Partners Technology Merger Corp.
|
||
|
Date: November 17, 2023
|
By:
|
/s/ Sean O’Brien
|
|
Sean O’Brien
|
||
|
Chief Financial Officer
|
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36