Veea Inc 10-Q/A for FY2021 Q3
Veea Inc. (VEEA)
10-Q/A
2022-11-14
For: 2021-09-30
View Original
Added on
April 08, 2026
About this 10-Q/A
Veea Inc filed this 10-Q/A on November 14, 2022, covering the quarter ended September 30, 2021 (FY2021 Q3).
Headline figures
Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net income
- $4.07M
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR
M 10-Q/A
(Amendment No. 1)
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period
ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
(Address of principal executive offices) |
(Zip Code) |
(415 ) 683-6773
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-fifth of one redeemable warrant |
||||
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
s). Regulation S-T (§232.405of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fileIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer,
a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act. Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in ☒ No ☐
Rule 12b-2 of
the Exchange Act). Yes As of
N
ovember 14, 20
2
2
,Class A ordinary shares, par value $0.0001, and
Class B ordinary shares, par value $0.0001, were issued and outstanding.
PLUM ACQUISITION CORP. I
Quarterly
Report on Form 10-Q/A
Table of Contents
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EXPLANATORY NOTE
Plum Acquisition Corp. I (the “Company,” “Plum,” “we,” “us” or “our”) is filing this Amendment No. 1 to its Quarterly Report on Form
10-Q/A
for the quarterly period ended September 30, 2021 (this “Form 10-Q/A”),
to amend its Quarterly Report on Form 10-Q
for the quarterly period September 30, 2021 originally filed with the Securities and Exchange Commission (the “SEC”) on November 22, 2021 (the “Original Quarterly Report”).Background of Restatement
On April 20, 2022, management of Plum Acquisition Corp. I (the “Company”) and the audit committee of the Company’s board of directors (the “Audit Committee”), concluded that the Company’s previously issued unaudited interim financial statements included in the Company’s Quarterly Report on Form
10-Q
(the “Q3 Form 10-Q”)
for the quarterly period ended September 30, 2021, filed with the SEC on November 22, 2021 (the “Affected Period”), should be restated and no longer be relied upon due to misstatements in (i) warrant liability on the Company’s condensed balance sheet as of September 30, 2021 and (ii) change in fair value of warrants on the Company’s condensed statements of operations for the three months ended September 30, 2021 and for the period from January 11, 2021 (inception) to September 30, 2021. As such, the Company is restating the Company’s financial statements for the Affected Period in this Form 10-Q/A.
The restatement does not have an impact on the Company’s cash position or amount held in the trust account.
The financial information that has been previously filed or otherwise reported for the Affected Periods is superseded by the information in this Form
10-Q/A,
and the financial statements and related financial information contained in the Original Quarterly Report should no longer be relied upon. On April 21, 2022, the Company filed a Current Report on Form 8-K
disclosing the Audit Committee’s conclusion that the unaudited interim financial statements for the Affected Periods should no longer be relied upon. Internal Control Considerations
In connection with the restatement, management has
re-evaluated
the effectiveness of the Company’s disclosure controls and procedures and internal control over financial reporting as of September 30, 2021. The Company’s management has concluded that, in light of the misstatement described above, and the filing of the Original Quarterly Report, a material weakness exists in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective. Management plans to enhance the system of evaluating and implementing the accounting standards that apply to our financial statements, including enhanced training of our personnel and increased communication among our personnel and third-party professionals with whom we consult regarding application of complex financial instruments. For a discussion of management’s consideration of our disclosure controls and procedures, internal controls over financial reporting, and the material weaknesses identified, see Part I, Item 4, “Controls and Procedures” of this Form 10-Q/A.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
PLUM ACQUISITION CORP. I
CONDENSED BALANCE SHEET
SEPTEMBER 30, 2021
(Restated/Unaudited)
| Assets: |
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| Cash and cash equivalents |
$ | |||
| Prepaid expenses |
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| Total current assets |
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| Investments held in Trust Account |
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| Other non-current assets |
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| Total assets |
$ | |
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| Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit |
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| Due to related party |
$ | |||
| Accrued offering costs and expenses |
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| |
|
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| Total current liabilities |
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| Warrant liability |
||||
| Deferred underwriting commissions liability |
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| Total liabilities |
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| Commitments (Note 9) |
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| Class A Ordinary shares subject to possible redemption, |
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| |
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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 |
||||
| Accumulated deficit |
( |
) | ||
| |
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| Total shareholders’ deficit |
( |
) | ||
| |
|
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| Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit |
$ | |
||
| |
|
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
PLUM ACQUISITION CORP. I
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 AND
FOR THE PERIOD FROM JANUARY 11, 2021 (INCEPTION) TO SEPTEMBER 30, 2021
(Restated/Unaudited)
For the three months ended September 30, 2021 (Restated) |
For the period from January 11, 2021 (inception) to September 30, 2021 (Restated) |
|||||||
Formation and operating expenses |
$ | $ | ||||||
Loss from operations |
( |
) | ( |
) | ||||
Other income (expense) |
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Change in fair value of warrants |
||||||||
Transaction costs allocated to warrant liability |
( |
) | ||||||
Interest income – operating account |
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Interest income – trust account |
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Total other income |
||||||||
Net Income |
$ | $ | ||||||
Weighted average shares outstanding, Class A ordinary shares |
||||||||
Basic and diluted net income per ordinary share, Class A ordinary shares |
$ | $ | ||||||
Weighted average shares outstanding, Class B ordinary shares |
||||||||
Basic and diluted net income per ordinary share, Class B ordinary shares |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
PLUM ACQUISITION CORP. I
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE PERIOD FROM JANUARY 11, 2021 (INCEPTION) TO SEPTEMBER 30, 2021
AND FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021
(Restated/Unaudited)
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-In Capital |
Accumulated Deficit |
Shareholders’ Deficit |
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Shares |
Amount |
Shares |
Amount |
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| Balance as of January 11, 2021 (Inception) |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||
| Class B ordinary shares issued to sponsor |
— | — | — | |||||||||||||||||||||||||
| Sale of |
— | — | — | |||||||||||||||||||||||||
| Offering costs |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| Change in Class A ordinary shares subject to redemption, as restated |
( |
) | ( |
) | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| |
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| Balance as of March 31, 2021, as restated |
$ |
$ |
$ |
|
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
| Sale of |
||||||||||||||||||||||||||||
| Offering costs |
— | — | — | — | ( |
) | — | ( |
) | |||||||||||||||||||
| Forfeit of Founder Shares |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
| Excess cash received over FV of private placement warrants |
— |
— |
— |
— |
— |
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| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| Change in Class A ordinary shares subject to redemption, as restated |
( |
) |
( |
) |
— | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||
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| Balance as of June 30, 2021, as restated |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
| Net income |
— | — | — | — |
— | |||||||||||||||||||||||
| |
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| Balance as of September 30, 2021 , as restated |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
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The accompanying notes are an integral part of these unaudited condensed financial statements.
3
PLUM ACQUISITION CORP. I
CONDENSED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 11, 2021 (INCEPTION) TO SEPTEMBER 30, 2021
(Restated/Unaudited)
For the Period From January 11, 2021 (Inception) to September 30, 2021 (Restated) |
||||
| Cash Flows from Operating Activities: |
||||
| Net Income |
$ | |||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||
| Interest earned on cash held in Trust Account |
( |
) | ||
| Change in fair value of warrant liabilities |
( |
) | ||
| Transaction costs |
||||
| Changes in operating assets and liabilities |
||||
| Prepaid expense |
( |
) | ||
| Due to related party |
||||
| Accounts payable and accrued expenses |
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| |
|
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| Net cash used in operating activities |
( |
) | ||
| |
|
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| Cash flows from investing activities: |
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| Investments and marketable securities held in Trust |
( |
) | ||
| |
|
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| Net cash used in investing activities |
( |
) | ||
| |
|
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| Cash flows from financing activities: |
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| Proceeds from sale of ordinary shares to initial shareholders |
||||
| Proceeds from sale of Units, net of offering costs |
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| Proceeds from issuance of Private Placement Warrants |
||||
| Payment of offering costs |
( |
) | ||
| |
|
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| Net cash provided by financing activities |
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| |
|
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| Net Change in Cash |
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| Cash, beginning of the period |
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| |
|
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| Cash, end of period |
$ |
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| |
|
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| Supplemental Disclosure of Non-cash Financing Activities |
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| Deferred underwriting commissions payable charged to additional paid in capital |
$ | |||
| |
|
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| Class A ordinary shares subject to possible redemption |
$ | |||
| |
|
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| Initial classification of warrant liabilities |
$ | |||
| |
|
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| Forfeit of Founder Shares |
$ | |||
| |
|
|||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
PLUM ACQUISITION CORP. I
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
(Restated/Unaudited)
Note 1 — Organization and Business Operations
Plum Acquisition Corp. I (the “Company”) was incorporated as a Cayman Islands exempted company on January 11, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”). The Company has not selected any Business Combination target and it has not, nor has anyone on the Company’s behalf, initiated any substantive discussions, directly or indirectly, with any potential Business Combination target. The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company. The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of September 30, 2021, the Company had not commenced any operations. All activity for the period from January 11, 2021 (inception) through September 30, 2021 relates to the Company’s formation and the initial public offering (“IPO”), which is described below. The Company believes it will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating
income in the form of interest income on investments in the Company’s Trust account and will recognize changes in the fair value of the warrant liability as other income (expense). The Company’s Sponsor
is Plum Partners, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s IPO was declared effective on March 15, 2021 (the “Effective Date”). On March 18, 2021, the Company consummated the initial public offering (the “Public Offering” or “IPO”) of 30,000,000 units (the “Units), at $10.00 per Unit, generating gross proceeds of $300,000,000 , which is discussed in Note 4.
Simultaneously with the
closing of the IPO, the Company consummated the sale of 6,000,000 warrants (the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant, which is discussed in Note 5. Each warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, generating gross proceeds of $9,000,000 , which is described in Note 5.
The Company
a 45 -day option
from March 18, 2021 to purchase up to an additional The underwriters
partially exercised the over-allotment option on April 14, 2021, and purchased 1,921,634 Units at $10.00 per Unit. On April 14, 2021, $19,216,340 , net of the underwriter discount, was deposited in the Company’s Trust account.
Simultaneously
with the issuance and sale of the Units on April 14, 2021, the Company consummated the private placement with the Sponsor for an aggregate of 256,218 warrants to purchase Class A Ordinary Shares for $1.50 per warrant generating total proceeds of $384,327 .
A total
of $19,216,340 was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee.
Transaction costs
of the IPO and the exercise of the over-allotment option amounted to $18,336,269 consisting of $6,384,327 of underwriting discount, $11,172,572 of deferred underwriting discount, and $779,370 of other offering costs. Of the transaction costs, $538,777 is included in transaction costs on the statement of operations and $17,797,492 is included in equity.
5
Following the
(approximately $
per Unit) from the net proceeds of the sale of the Units in the Public Offering, including the proceeds from the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) located in the United States at Goldman Sachs, with Continental Stock Transfer & Trust Company acting as trustee, and was invested in money market funds meeting certain conditions under Rule
2a-7
under the Investment Company Act which invests only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account (1) to the Company, until the completion of our initial Business Combination, or (2) to the Public Shareholders, until the earliest of (i) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of its Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeemof the public shares if the Company does not complete its initial Business Combination within
months from the closing of the IPO (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (iii) the redemption of the public shares if the Company has not consummated its Business Combination within the Combination Period, subject to applicable law. Public Shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (ii) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination Period, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Public Shareholders (as defined below).
The Company
Combination at a per-share price, payable in
cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, if any, divided by the number of then-outstanding Public Shares, subject to certain limitations. The amount in the Trust Account is initially anticipated to be $Public Share. The per-share amount the Company
will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. These Public
Shares have been classified as temporary equity upon the completion of the IPO in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 and the approval of an ordinary resolution.
The Company
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 its taxes, if any (less up to $6
The Sponsor, officers
and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100 % of the its public shares if the Company does not complete our initial Business Combination within the Combination Period or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its initial Business Combination within the prescribed time frame) and (iv) vote their Founder Shares and public shares in favor of our initial Business.
Liquidity and Capital Resources
The Company’s liquidity
needs up to March 18, 2021 had been satisfied through a capital contribution from the Sponsor of $25,000
(see Note 6) for the Founder Shares. In addition, in order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors have committed to provide the Company Working Capital Loans (see Note 6). To date, there
were no amounts outstanding under any Working Capital Loans.
After the IPO, as of September 30, 2021, the Company had approximately $0.4 million in its operating bank account, and working capital of approximately $0.7 million.
Based on the foregoing, Management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this
filing. Over this time period, the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Risks and Uncertainties
Management continues to evaluate the impact
of the COVID-19 pandemic 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 search for a target company, the specific impact is not readily determinable as of the date of these condensed financial statements. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. Note 2 — Restatement of Previously Issued Financial Statements
In connection with the preparation of the Company’s financial statements as of December 31, 2021, management determined it should restate its previously reported financial statements for the period ended September 30, 2021. The Company previously calculated the fair value of total warrant liability on the condensed balance sheet based on incorrect number of outstanding warrants. This resulted in an adjustment to the carrying value of warrant liability and accumulated deficit on the condensed balance sheet with the offset recorded to change in fair value of warrants on the condensed statement of operations.
In connection with the change in the total fair value of warrant liabilities, the Company also restated its earnings per share calculation to allocate the restated net income pro rata to ordinary shares subject to redemption and those that are not subject to redemption.
There has been no change in the Company’s total assets.
7
The impact of the revision on the Company’s financial statements is reflected in the following table:
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Balance Sheet as of September 30, 2021 |
||||||||||||
| Warrant liability |
$ |
$ |
( |
) |
$ |
|||||||
| |
|
|
|
|
|
|||||||
| Total liabilities |
$ |
$ |
( |
) |
$ |
|||||||
| Accumulated deficit |
$ |
( |
) |
$ |
$ |
( |
) | |||||
| |
|
|
|
|
|
|||||||
| Total shareholders’ deficit |
$ |
( |
) |
$ |
$ |
( |
) | |||||
| |
|
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|
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As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Statement of Operations for the three months ended September 30, 2021 |
||||||||||||
| Change in fair value of warrants |
$ |
$ |
$ |
|||||||||
| Total other income |
$ |
$ |
$ |
|||||||||
| Net income |
$ |
$ |
$ |
|||||||||
| Allocation of net income – Class A |
$ |
$ |
$ |
|||||||||
| Basic and diluted net income per ordinary share, Class A ordinary shares |
$ |
$ |
$ |
|||||||||
| Allocation of net income – Class B |
$ |
$ |
$ |
|||||||||
| Basic and diluted net income per ordinary share, Class B ordinary shares |
$ |
$ |
$ |
|||||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Statement of Operations for the period from January 11, 2021 (inception) through September 30, 2021 |
||||||||||||
| Change in fair value of warrants |
$ |
$ |
$ |
|||||||||
| Total other income |
$ |
$ |
$ |
|||||||||
| Net income |
$ |
$ |
$ |
|||||||||
| Allocation of net income – Class A |
$ |
$ |
$ |
|||||||||
| Basic and diluted net income per ordinary share, Class A ordinary shares |
$ |
$ |
$ |
|||||||||
| Allocation of net income – Class B |
$ |
$ |
$ |
|||||||||
| Basic and diluted net income per ordinary share, Class B ordinary shares |
$ |
$ |
$ |
|||||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Changes In Shareholders’ Deficit for the three months ended September 30, 2021 |
||||||||||||
| Net income |
$ |
$ |
$ |
|||||||||
| Total shareholders’ deficit |
$ |
( |
) |
$ |
$ |
( |
) | |||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Changes In Shareholders’ Deficit for the period from January 11, 2021 (inception) through September 30, 2021 |
||||||||||||
| Net income |
$ |
$ |
$ |
|||||||||
| Total shareholders’ deficit |
$ |
( |
) |
$ |
$ |
( |
) | |||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Cash Flows for the period from January 11, 2021 (inception) through September 30, 2021 |
||||||||||||
| Net income |
$ |
$ |
$ |
|||||||||
| Change in fair value of warrants |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
In
restate
its previously reported financial statements. The Company previously determined the ordinary shares subject to possible redemption to be equal to the redemption value of $. Upon review of its financial statements for the period ended September 30, 2021, the Company reevaluated the classification of the ordinary shares and determined that the ordinary shares issued during the IPO and pursuant to the exercise of the underwriters’ overallotment can be redeemed or become redeemable subject to the occurrence of future events considered outside the Company’s control under management concluded that the carrying value should include all ordinary shares subject to possible redemption, resulting in the ordinary shares subject to possible redemption being classified as temporary equity in its entirety. As a result, management has noted a restatement adjustment related to temporary equity and permanent equity. This resulted in an adjustment to the initial carrying value of the ordinary shares subject to possible redemption with the offset recorded to additional
ASC480-10-S99.Therefore,
paid-in
capital (to the extent available), retained earnings (accumulated deficit) and ordinary shares. 8
In connection with the change in presentation for the ordinary shares subject to redemption, the Company also its earnings per share calculation to allocate net income (loss) pro rata to ordinary shares subject to redemption and those that are not subject to redemption. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of ordinary shares pro rata in the income (loss) of the Company.
restated
There has been no change in the Company’s total assets, liabilities or operating results.
The impact of the revision on the Company’s financial statements is reflected in the following table:
As Reported |
Restatement |
As Restated |
||||||||||
| Balance Sheet as of March 18, 2021 (as restated in FN2 per form10-Qfiled on June 4, 2021) |
||||||||||||
| Ordinary Share subject to possible redemption |
$ | |
$ | $ | ||||||||
| Ordinary shares Class A, $ |
( |
) | — | |||||||||
| Additional Paid in Capital |
( |
) | — | |||||||||
| Accumulated Deficit |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Total Shareholders’ Equity (Deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
| |
|
|
|
|
|
|||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Balance Sheet as of March 31, 2021 |
||||||||||||
| Ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Ordinary shares Class A, $ |
$ | $ | ( |
) | $ | — | ||||||
| Additional Paid in Capital |
( |
) | — | |||||||||
| Accumulated deficit |
( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Total shareholders’ equity/(deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
| |
|
|
|
|
|
|||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Statement of Operations for the period from January 11, 2021 (inception) through March 31, 2021 |
||||||||||||
| Basic and diluted weighted average shares, redeemable shares |
||||||||||||
| Basic and diluted net income per share, redeemable shares |
$ | — | $ | $ | ||||||||
| Basic and diluted weighted average shares, non-redeemable shares |
( |
) | ||||||||||
| Basic and diluted net income per share, non-redeemable shares |
$ | $ | ( |
) | $ | |||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Changes In Shareholders’ Deficit for the period from January 11, 2021 (inception) through March 31, 2021 |
||||||||||||
| Change in value of Class A ordinary shares subject to possible redemption |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Cash Flows for the period from January 11, 2021 (inception) through March 31, 2021 |
||||||||||||
| Initial value of Class A ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Balance Sheet as of June 30, 2021 |
||||||||||||
| Ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
| Ordinary shares Class A, $ |
( |
) | — | |||||||||
| Additional Paid in Capital |
( |
) | — | |||||||||
| Accumulated deficit |
( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Total shareholders’ equity/(deficit) |
$ | $ | ( |
) | $ | ( |
) | |||||
| |
|
|
|
|
|
|||||||
9
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Statement of Operations for the three months ended June 30, 2021 |
||||||||||||
| Basic and diluted weighted average shares, redeemable shares |
||||||||||||
| Basic and diluted net income per share, redeemable shares |
$ | — | $ | $ | ||||||||
| Basic and diluted weighted average shares, non-redeemable shares |
( |
) | ||||||||||
| Basic and diluted net income per share, non-redeemable shares |
$ | $ | ( |
) | $ | |||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Statement of Operations for the period from January 11, 2021 (inception) through June 30, 2021 |
||||||||||||
| Basic and diluted weighted average shares, redeemable shares |
||||||||||||
| Basic and diluted net income per share, redeemable shares |
$ | — | $ | $ | ||||||||
| Basic and diluted weighted average shares, non-redeemable shares |
( |
) | ||||||||||
| Basic and diluted net income per share, non-redeemable shares |
$ | $ | ( |
) | $ | |||||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Changes In Shareholders’ Deficit for the three months ended June 30, 2021 |
||||||||||||
| Change in value of Class A ordinary shares subject to possible redemption |
$ | ( |
) | $ | $ | ( |
) | |||||
As Reported |
Restatement |
As Restated |
||||||||||
| Unaudited Condensed Statement Of Cash Flows for the period from January 11, 2021 (inception) through June 30, 2021 |
||||||||||||
| Initial value of Class A ordinary shares subject to possible redemption |
$ | $ | $ | |||||||||
Note 3 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Q
and Article 10 of Regulation S-X
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 complete 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. 10
The accompanying unaudited condensed financial statements should be read in conjunction with
the Company’s 8-K as filed
with the SEC on March 24, 2021, which contains the audited financial statements and notes thereto. The interim results for the period ending September 30, 2021 are not necessarily indicative of the results to be expected for the period ending December 31, 2021 or for any future interim periods. Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts 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 an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging
growth companies but any such an 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 the comparison of the Company’s financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that 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 the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, actual results could differ from those 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 did not have any cash equivalents as of September 30, 2021.
Investments Held in Trust Account
At September 30, 2021, funds held in the Trust Account include $319,226,549 of investments held in a money market fund characterized as Level 1 investments within the fair value hierarchy under ASC 820 (as defined below).
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000 . The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
11
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.
Offering Costs
The Company complies with the requirements of Staff Accounting Bulletin (“SAB”) Topic 5A— “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering. Offering costs are charged to shareholders’ equity or the statement of operations based on the relative value of the Warrants to the proceeds received from the Units sold upon the completion of the IPO.
the ASC 340-10-S99-1 and SEC
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, (excluding the Warrants) which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Warrant Liability
The Company accounts for the Warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the Warrants and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“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 meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company’s own ordinary shares and whether the holders of the Warrants could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and 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, such 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, liability-classified 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 such warrants are recognized as a non-cash gain or
loss on the statements of operations. The Company accounts for the Public and Private warrants in accordance with guidance contained in
ASC815-40.
Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability (See Note 7). 1
2
Fair Value Measurements
FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 — |
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. | |
Level 2 — |
Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. | |
Level 3 — |
Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |
The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of September 30, 2021 due to the short maturities of such instruments. See Note 8 for additional information on warrant liabilities measured at fair value.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2021, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the period presented. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income Per Ordinary Share (As Restated — See Note 2)
The Company has two class
es of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The potential 12,000,000 ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three months ended September 30, 2021 and for the period from January 11, 2021 (inception) through September 30, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the
periods. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary share:
1
3
For the Three Months Ended September 30, 2021 (as restated) |
For the Period from January 11, 2021 (Inception) through September 30, 2021 (as restated) |
|||||||||||||||
Class A |
Class B |
Class A |
Class B |
|||||||||||||
Numerator |
||||||||||||||||
Allocation of net income |
$ | $ | $ | $ | ||||||||||||
Denominator |
||||||||||||||||
Weighted average shares outstanding |
||||||||||||||||
Basic and diluted net income per ordinary share |
$ | $ | $ | $ | ||||||||||||
Recent Accounting Standards
In August 2020, the Financial Accounting
(“ASU 2020-06”)
to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements. Management does not believe that any other recently issued, but no
t yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Note 4 — Initial Public Offering
On March 18, 2021, the Company
share, and one-fifth of one
redeemable warrant. Each whole warrant entitles the holder thereof to purchase one Class A ordinary share at a price of $7
). On April 14, 2021, the Company sold
and one-fifth of
one redeemable warrant.All of
Class A ordinary share 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 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 Company’s certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in redemption provisions not solely within the control of the Company require ordinary share subject to redemption to be classified outside of permanent equity.
ASC480-10-S99,
The Class A ordinary share is subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value immediately as they occur. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable ordinary share resulted in charges against additional
ASC480-10-S99.If
paid-in
capital and accumulated deficit. 1
4
Note 5 — Private Placements
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 6,000,000 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $9,000,000 , in a private placement. Simultaneously with the issuance and sale of the Units on April 14, 2021, the Company consummated the private placement with the Sponsor for an aggregate of 256,218 warrants to purchase Class A Ordinary Shares for $1.50 per warrant generating total proceeds of $384,327 . A portion of the proceeds from the private placements were added to the proceeds from the IPO 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 Warrants 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.
The Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the IPO. The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination (except pursuant to limited exceptions to the Company’s officers and directors and other persons or entities affiliated with the initial purchasers of the Private Placement Warrants) and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis.
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units being sold in the IPO.
Note 6 — Related Party Transactions
Founder Shares
On January 13, 2021, the Sponsor paid $25,000 , or approximately $0.003 per share, to cover certain offering costs in consideration for 8,625,000
Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”). Up to 1,125,000 Founder Shares were subject to forfeiture to the extent
that the over-allotment option was not exercised in full by the underwriters. On April 14, 2021 the underwriters partially exercised their over-allotment option buying1,921,634 Units thus reducing the total number of share subject to forfeiture to 644,591 . On May 2, 2021 the underwriters’ over-allotment option expired and 644,591 Founder Shares were forfeited to the Company.
Class B ordinary shares, par value $
that the over-allotment option was not exercised in full by the underwriters. On April 14, 2021 the underwriters partially exercised their over-allotment option buying
The Sponsor and the Company’s directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until earliest of (A) one year after the completion of the initial Business Combination and (B) subsequent to the initial Business Combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading 150 days after the 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
days within any 30 -trading day period commencing
at least other property (the “Lock-up”). Any permitted transferees
would be subject to the same restrictions and other agreements of the Sponsor and the directors and executive officers with respect to any Founder Shares. Promissory Note — Related Party
On January 13, 2021, the Sponsor agreed to loan the Company up to $300,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”). no borrowings under the
This loan is no n-interest bearing and payable
on the earlier of November 30, 2021 or the completion of the IPO. As of September 30, 2021, the Company has Note. Borrowings under this note are no longer available.
1
5
Working Capital Loans
In addition, in order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors, have committed 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 out of the proceeds of the Trust Account released to it. In the event that a Business Combination does not close, the Company may use a portion of the working capital 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. Up
to $1,500,000 of the Working Capital Loans may be convertible into Private Placement Warrants of the post Business Combination entity at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. Except as set forth above, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. Prior to the completion of the initial Business Combination, the Company does not expect to seek loans from parties other than the Sponsor its affiliates or any members of the Company’s management team as the Company does 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 the Company’s Trust Account.
Administrative Support Agreement
The Company will pay the Sponsor or an affiliate of the Sponsor for office space, secretarial and administrative services provided to members of the management team, in the amount of $10,000 per month. Upon completion of the initial Business Combination or the its liquidation, the Company will cease paying these monthly fees.
Note 7 — Warrants
The Public Warrants will become exercisable at $11.50 per share, subject to adjustment, at any time commencing 30 days after the completion of the initial Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder. The warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than business days after the closing of the initial Business Combination, it will use commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the 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 elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. 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 the 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 its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (as defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 . The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
1
6
In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the Class A ordinary share underlying such unit.
Redemption of Warrants When the Price per Class A Ordinary Share Equals or Exceeds
$18.00
Once the warrants become exercisable, the Company may redeem the outstanding warrants (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 sale price of the Class A ordinary shares equals or exceeds $ a day period ending three trading days before the Company sends the notice of redemption to the warrant holders. |
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 $ |
| • | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ the day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
| • | if the closing price of the Class A ordinary shares for any a day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $ |
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 the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of our Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
1
7
Note 8 — Recurring Fair Value Measurements
Investments Held in Trust Account
As of September 30, 2021, the investments in the Company’s Trust Account consisted of $319.2 million in U.S. Money Market funds. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments.
Fair values of the Company’s investments are classified as Level 1 utilizing quoted prices (unadjusted) in active markets for identical assets.
Recurring Fair Value Measurements (As Restated — See Note 2)
The Company’s permitted investments consist of U.S. Money Market funds. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. The Company’s initial value of the warrant liability was based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets and classified as level 3. The subsequent measurement of the Public Warrants is classified as Level 1 due to the use of an observable market price of these warrants. The subsequent measurement of the Private Warrants is classified as Level 2 because these warrants are economically equivalent to the Public warrants, based on the terms of the Private Warrant agreement, and as such their value is principally derived by the value of the Public Warrants. Significant deviations from these estimates and inputs could result in a material change in fair value. At June 30, 2021, the Company reclassified the Public Warrants and Private Warrants from Level 3 to Level 1 and Level 2 respectively classification.
The following table presents fair value information as of September 30, 2021, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
| Assets |
||||||||||||||||
| Investments held in Trust Account - U.S. Money Market |
$ | |
$ | $ | $ | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Liabilities |
||||||||||||||||
| Public warrant liability |
||||||||||||||||
| Private warrant liability |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| $ | $ | $ | $ | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
Measurement
The following table provides a reconciliation of changes in the Level 3 fair value classification:
| Fair value at January 11, 2021 |
$ | |||
| Issuance due to IPO at March 18, 2021 |
||||
| Issuance of overallotment warrant placements (public and private) |
||||
| Reclassification of Private Warrants to Level 2 (1) |
( |
) | ||
| Reclassification of Public Warrants to Level 1 (1) |
( |
) | ||
| Change in fair value |
( |
) | ||
| |
|
|||
| Fair Value at September 30, 2021 |
$ | |||
| |
|
(1) |
These warrants were reclas s ified on June 30, 2021 |
1
8
Note 9 — Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and shareholder rights agreement to be signed prior to or on the effective date of the IPO. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. However, the registration and shareholder rights agreement provide that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable
, Lock-up
period, which occurs(i) in the case of the Founder Shares, as described in Note 6, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrantsdays after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company
the underwriters a 45 -day option from March 18,
2021 to purchase up to an additional On March 18, 2021, the Company paid the underwriters’ fee of $6,000,000 upon the closing of the IPO. Upon partial exercise of the over-allotment option, the Company paid $384,327 to the underwriters.
In addition, $11,172,572 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 10 — Shareholder’s Deficit
Preference Shares
Class
A Ordinary Shares
possible redemption.
Class
B Ordinary Shares
1
9
The Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have
aggregate, on an as-converted basis, 20 % of
the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the IPO, plus (ii) 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 the 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 the initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team 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 .
Note 11 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events other than noted below that would have required adjustment or disclosure in the condensed financial statements.
20
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 Plum Acquisition Corp. I. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Plum Partners, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the 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 on
Form 10-Q includes
“forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements other than statements of historical fact included in this Form 10-Q/A
including 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. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Overview
We are a blank check company incorporated as a Cayman Islands exempted company on January 11, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. We intend to consummate an initial business combination using cash from the proceeds of our Public Offering (the “Public Offering”) that closed on March 18, 2021 (the “Closing Date”) and the Private Placement, and from additional issuances of, if any, our equity and our debt, or a combination of cash, equity and debt.
Results of Operations
For the three months ended September 30, 2021 and for period from January 11, 2021 (inception) to September 30, 2021, we had a loss from operations of $481,907 and $1,394,368, respectively. In addition to the loss from operations, we recognized other income of $4,555,502 and $7,889,356, respectively consisting of an unrealized gain on our warrant liability of $4,550,597 and $8,417,922, respectively and interest income of $4,905, and $10,211, respectively partially offset by transaction costs related to our IPO of $0 and $538,777, respectively. Through September 30, 2021, our efforts have been limited to organizational activities, activities relating to identifying and evaluating prospective acquisition candidates and activities relating to general corporate matters. We have not generated any realized income, other than interest income. The unrealized gain on the warrant liability resulted from the change in fair value of our warrant liability and had no impact on cash. As of September 30, 2021, $319,226,549 was held in the Trust Account. We had cash outside of trust of $368,210 in September 30, 2021 and $100,140 accounts payable and accrued expenses as of September 30, 2021.
Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay taxes, if any, the proceeds in the Trust will not be released from the Trust Account (1) to us, until the completion of our initial Business Combination, or (2) to the Public Shareholders, until the earliest of (i) the completion of our initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations, (ii) the redemption of any public shares properly tendered in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial Business Combination or to redeem 100% of the public shares if we do not complete an initial Business Combination within 24 months from the closing of the IPO (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (iii) the redemption of the public shares if we have not consummated a Business Combination within the Combination Period, subject to applicable law.
21
Liquidity and Capital Resources
As of September 30, 2021, we had cash outside our Trust Account of $368,210, available for working capital needs. We intend to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
In March and April 2021, we sold of 31,921,634 units (the “Units” and, with respect to the shares of Class A ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $319,216,340.
Additionally, we sold of 6,256,218 warrants (the “Private Warrants”), at a price of $1.50 per Private Warrant, generating gross proceeds of $9,384,327.
Following the sale of our Units and the sale of the Private Warrants, a total of $319,216,340 ($10.00 per Unit) was placed in the Trust Account. We incurred $18,336,269 in Initial Public Offering related costs, including $6,384,327 of underwriting fees, $11,172,572 of deferred underwriting discount and $779,370 of other costs with $538,777 which was allocated to the Public Warrants and Private Warrants, included in the statement of operations and $17,797,492 included in shareholders’ equity.
As of September 30, 2021, we had marketable securities held in the Trust Account of $319,226,549 (including approximately $10,209 of income) consisting of money market funds. Income on the balance in the Trust Account may be used to pay taxes. Through September 30, 2021, we did not withdraw any interest earned on the Trust Account to pay our taxes.
For nine months ended September 30, 2021, cash used in operating activities was $1,877,420. Net income of $6,494,988 was primarily offset by an unrealized gain on the change in the fair value of our warrant liability of $8,417,922 and payments generating prepaid assets of $660,308. Partially offsetting the net income was $538,777 from IPO related transaction costs. Other operational activities including amounts due to related party generated $177,254.
We intend to use substantially all of the funds held in the Trust Account, to acquire a target business and to pay our expenses relating thereto. 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 target business or businesses, make other acquisitions and pursue our growth strategies.
Further, our sponsor, officers and directors or their respective affiliates have committed to loan us funds as may be required (the “Working Capital Loans”). If we complete a business combination, we would repay the Working Capital Loans. In the event that a business combination does not close, we 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. Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion, or converted upon consummation of a business combination into additional Private Warrants at a price of $1.50 per Private Warrant. As of September 30, 2021, no Working Capital Loans have been issued.
22
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business,
undertaking in-depth due
diligence and negotiating a business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our business combination. Moreover, in addition to the access to the Working Capital Loans, we may need to obtain other financing either to complete our business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our business combination, in which case we may issue additional securities or incur debt in connection with such 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 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. Off-Balance Sheet
Arrangements We have no obligations, assets or liabilities which would be
considered off-balance sheet
arrangements as of September 30, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet
arrangements. We have not entered into
any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements
involving assets. Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:
Warrant Liabilities
We account for the Warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the Warrants and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“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 meet all of the requirements for equity classification under ASC 815, including whether the Warrants are indexed to the Company’s own ordinary shares and whether the holders of the Warrants could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of issuance of the Warrants and 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, such 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, liability-classified 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 such warrants are recognized as a non-cash
gain or loss on the statements of operations. We account for the Public and Private warrants in accordance with guidance contained in ASC815-40.
Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. 23
Redeemable Shares of Class A Ordinary shares
All of the 31,921,634 shares of Class A ordinary shares included in the Units sold as part of the Public Offering contain a redemption feature as described in the prospectus for the Public Offering. In accordance with FASB ASC 480, “Distinguishing Liabilities from Equity”, redemption provisions not solely within the control of the Company require the security to be classified outside of permanent equity. The Charter provides a minimum net tangible asset threshold of $5,000,001. The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value of the security at the end of each reporting period. Increases or decreases in the carrying amount of redeemable shares will be affected by charges against
additional paid-in capital.
Net Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three and nine months ended September 30, 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per common share is the same as basic net income per common share for the periods.
Recent accounting standards
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2020-06,
Debt — Debt with Conversion and Other Options (Subtopic 470-20)
and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)
(“ASU 2020-06”)
to simplify accounting for certain financial instruments. ASU 2020-06
eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06
amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06
is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06
effective January 1, 2021. The adoption of ASU 2020-06
did not have an impact on the Company’s financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed financial statements. Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as
defined by Rule 12b-2 of the Exchange
Act and are not required to provide the information otherwise required under this item. Item 4. Controls and Procedures
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. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2021, due to the material weakness in our internal controls over accounting and reporting complex financial instruments including the proper classification of warrants as liabilities and redeemable Class A ordinary shares as temporary equity and reporting of the warrant liabilities including the change in fair value of the warrants as described in the Explanatory Note. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our unaudited interim financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q
present fairly in all material respects our financial position, results of operations and cash flows for the periods presented. 24
Regarding the restatements to the March 31, 2021 and June 30, 2021 quarterly financial statements included in the Company’s Form
10-Qs,
as filed with the SEC on June 4, 2021 and August 16, 2021, respectively, as well as the Company’s balance sheet included on the Company’s Form 8-K,
as filed with the SEC on March 24, 2021, certain redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of the Class A ordinary shares in permanent equity. The Company restated its financial statements to classify all Class A ordinary shares as temporary equity and any related impact, as the threshold in its charter would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside of permanent equity. Regarding the restatement to the September 30, 2021 quarterly financial statements included in the Company’s Form
10-Qs,
as filed with the SEC on November 22, 2021, the fair value of total warrant liability on the condensed balance sheet was based on an incorrect number of outstanding warrants. The Company restated its financial statements to adjust the carrying value of warrant liability and accumulated deficit on the condensed balance sheet with the offset recorded to change in fair value of warrants on the condensed statements of operations. It is noted that the
non-cash
adjustments to the financial statements do not impact the amounts previously reported for our cash and cash equivalents or total assets. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our unaudited interim financial statements were prepared in accordance with U.S. generally accepted accounting principles. Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter of 2021 covered by this Quarterly Report on Form
10-Q
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In light of the material weakness, we have enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. 25
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors.
There have been no material changes from the risk factors previously disclosed in the Company’s final prospectus for the Initial Public Offering as filed with the SEC on March 17, 2021, except for the below risk factors. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Our Warrants are accounted for as liabilities and the changes in value of our Warrants could have a material effect on our financial results.
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the SEC together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled “Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Statement”). Specifically, the SEC Statement focused on warrants that have certain settlement terms and provisions related to certain tender offers or warrants which do not meet the criteria to be considered indexed to an entity’s own stock, which terms are similar to those contained in the warrant agreement governing our Warrants. As a result of the SEC Statement, we reevaluated the accounting treatment of our 6,000,000 Public Warrants and 6,000,000 Private Placement Warrants, and determined that the Warrants should be reclassified as derivative liabilities measured at fair value, with changes in fair value each period reported in earnings.
As a result, included on our balance sheet as of September 30, 2021 contained elsewhere in
this Form 10-Q are derivative
liabilities related to embedded features contained within our Warrants. Accounting Standards Codification 815-40, “Derivatives and
Hedging—Contracts on an Entity’s Own Equity”, provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or
loss related to the change in the fair value being recognized in earnings in the statement of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly, based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or
losses on our Warrants each reporting period and that the amount of such gains or losses could be material. We have identified a material weakness in our internal control over financial reporting. If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
Following issuance of the SEC Staff Statement on April 12, 2021, and after consultation with our independent registered public accounting firm, our management and our audit committee concluded that, in light of the SEC Statement, it was appropriate to restate our previously issued audited balance sheet as of March 18, 2021, which we filed with the SEC on Form
8-K
on March 24, 2021, to account for the warrants as liabilities measured at fair value, rather than equity securities (the “Restatement”). See “—Our warrants are accounted for as liabilities and the changes in value of our warrants could have a material effect on our financial results.” As a result of these events, which led to the Restatement, we have identified a material weakness in our internal control over financial reporting. Additionally, our management to our accounting classification of public shares. After consultation with our independent registered public accounting firm, our management and our audit committee concluded that it was appropriate to restate our previously issued Restated Balance Sheet and unaudited interim financial statements included in our current report on Form
re-evaluated
our application of ASC 480-10-S99-3A
8-K
filed with the SEC on March 24, 2021 and our Quarterly Reports on Form 10-Q
for the quarterly periods ended March 31, 2021 and June 30, 2021, filed with the SEC on May 28, 2021 and August 16, 2021, respectively. As part of such process, we identified an additional material weakness in our internal control over financial reporting. Lastly, regarding the restatement to the September 30, 2021 quarterly financial statements included in the Company’s Form 10-Qs, as filed with the SEC on November 22, 2021, the fair value of total warrant liability on the condensed balance sheet was based on an incorrect number of outstanding warrants. The Company restated its financial statements to adjust the carrying value of warrant liability and accumulated deficit on the condensed balance sheet with the offset recorded to change in fair value of warrants on the condensed statements of operations. As part of such process, we identified an additional material weakness in our internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. We continue to evaluate steps to remediate the material weakness. If we identify any new material weakness in the future, any such newly identified material weakness could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In such case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting and the price of our securities may decline as a result. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
27
Item 6. Exhibits.
| * | Filed herewith. |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
28
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 on
this 14th day
of
November 2022.
Plum Acquisition Corp. I | ||
| By: | /s/ Michael Dinsdale | |
| Name: | Michael Dinsdale | |
| Title: | Financial Officer | |
EXHIBIT 31.1
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kanishka Roy, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period from July 1, 2021 through September 30, 2021 of Plum Acquisition Corp. I;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
| Date: November 14, 2022 | By: | /s/ Kanishka Roy | ||||
| Kanishka Roy | ||||||
| President | ||||||
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Dinsdale, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period from July 1, 2021 through September 30, 2021 of Plum Acquisition Corp. I;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. [Paragraph intentionally omitted in accordance with SEC Release Nos. 34-47986 and 34-54942];
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
| Date: November 14, 2022 | By: | /s/ Michael Dinsdale | ||||
| Michael Dinsdale | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer ) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Plum Acquisition Corp. I (the “Company”) on Form 10-Q for the period from July 1, 2021 through September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kanishka Roy, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 14, 2022 | /s/ Kanishka Roy | |||||
| Name: | Kanishka Roy | |||||
| Title: | President | |||||
| (Principal Executive Officer) | ||||||
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Plum Acquisition Corp. I (the “Company”) on Form 10-Q for the period from July 1, 2021 through September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Dinsdale, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: November 14, 2022 | /s/ Michael Dinsdale | |||||
| Name: | Michael Dinsdale | |||||
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |||||