References to the "Company," "BSGA," "our," "us" or "we" refer to Blue Safari
Group Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the unaudited interim condensed financial statements and the notes thereto
contained elsewhere in this report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act. We have based these forward-looking statements
on our current expectations and projections about future events. These
forward-looking statements are subject to known and unknown risks, uncertainties
and assumptions about us that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "should," "could," "would," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. Factors that might cause or contribute to
such a discrepancy include, but are not limited to, those described in our other
U.S. Securities and Exchange Commission ("SEC") filings.
Overview
We are a blank check company incorporated in the British Virgin Islands as a
business company and incorporated for the purpose of effecting a merger, share
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. We have not selected any specific
business combination target and we have not, nor has anyone on our behalf,
initiated any substantive discussions, directly or indirectly, with any business
combination target. We intend to effectuate our initial business combination
using cash from the proceeds of this offering and the private placement of the
private placement units, the proceeds of the sale of our securities in
connection with our initial business combination, our shares, debt or a
combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination (as defined below) will be successful.
Recent Developments
On November 18, 2021, the Company entered into an Agreement and Plan of Merger
(the "Original Merger Agreement") dated November 18, 2021 by and among the
Company, Blue Safari Mini Corp., an exempted company incorporated with limited
liability under the laws of the Cayman Islands and a wholly-owned subsidiary of
the Company ("Merger Sub"), and Bitdeer Technologies Holding Company, an
exempted company incorporated with limited liability under the laws of the
Cayman Islands ("Bitdeer").
On December 15, 2021, the Company entered into an Amended and Restated Agreement
and Plan of Merger (as amended from time to time, the "Merger Agreement") by and
among (i) the Company, (ii) Bitdeer Technologies Group, an exempted company with
limited liability incorporated under the laws of the Cayman Islands ("BTG"),
(iii) Blue Safari Merge Limited, a British Virgin Islands business company and a
wholly-owned subsidiary of BTG ("Merger Sub 1"), (iv) Blue Safari Merge II
Limited, a British Virgin Islands business company and a wholly-owned subsidiary
of BTG ("Merger Sub 2"), (v) Bitdeer Merge Limited, an exempted company with
limited liability incorporated under the laws of the Cayman Islands and a
wholly-owned subsidiary of BTG ("Merger Sub 3", and together with BTG, Merger
Sub 1 and Merger Sub 2, the "Acquisition Entities"), (vi) Merger Sub, and (vii)
Bitdeer, to amend and restate the Original Merger Agreement.
The Merger Agreement amended and restated the Original Merger Agreement to
effect a change in structure of the Business Combination without affecting any
underlying economic interests, whereby (a) Merger Sub 1 will merge with and into
the Company with the Company being the surviving entity (the "First SPAC
Merger") and becoming a wholly owned subsidiary of BTG, (b) immediately
following the First SPAC Merger, the Company will merge with and into Merger Sub
2 with Merger Sub 2 being the surviving entity (the "Second SPAC Merger", and
together with the First SPAC Merger, the "Initial Mergers"), and (c) following
the Initial Mergers, Merger Sub 3 will merge with and into Bitdeer (the
"Acquisition Merger" and together with the Initial Mergers, the
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"Mergers"), with Bitdeer being the surviving entity and becoming a wholly owned
subsidiary of BTG. The Merger Agreement and the transactions contemplated
therein were unanimously approved by the boards of directors of each of the
Company, BTG, Merger Sub 1, Merger Sub 2, Merger Sub 3, Merger Sub and Bitdeer.
The Mergers and other transactions contemplated by the Merger Agreement (the
"Business Combination") are expected to be consummated after obtaining the
required approval by the shareholders of the Company, BTG, Merger Sub 1, Merger
Sub 2, Merger Sub 3, Merger Sub, and Bitdeer and the satisfaction of certain
other customary closing conditions. For more information, see the Current Report
on Form 8-K dated December 15, 2021.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities from inception through March 31, 2022 were
organizational activities and those necessary to prepare for the Initial Public
Offering, and, following our initial public offering, identifying a target
business with which to engage in a Business Combination. We do not expect to
generate any operating revenues until after the completion of our initial
Business Combination. We expect to generate non-operating income in the form of
interest income on marketable securities held after the Initial Public Offering.
We expect that we will incur increased expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as
well as for due diligence expenses in connection with searching for, and
completing, a Business Combination.
For the three months ended March 31, 2022, we had a net loss of $2,076,990,
which consists of formation and operation costs amounting to $2,082,838,
partially offset by the interest income earned on Trust and operating accounts
amounting to $5,848.
For the period from February 23, 2021 (inception) to March 31, 2021, we had a
net loss of $8,010, which mainly was formation and operation costs.
Liquidity and Capital Resources
On June 9, 2021, Blue Safari Group Acquisition Corp. (the "Company") consummated
the IPO of 5,000,000 units (the "Units"). Each Unit consists of one ordinary
share ("Ordinary Share") and one right ("Right") to receive one-tenth of one
Ordinary Share upon the consummation of an initial business combination. The
Units were sold at an offering price of $10.00 per Unit, generating gross
proceeds of $50,000,000. The Company granted the underwriters a 45-day option to
purchase up to 750,000 additional Units to cover over-allotments, if any, which
the underwriters exercised in full simultaneously with the consummation of the
IPO. The total aggregate issuance by the Company of 5,750,000 units at a price
of $10.00 per unit resulted in a total gross proceeds of $57,500,000.
As of June 9, 2021, a total of $58,075,000 of the net proceeds from the IPO and
the Private Placement (as defined below) were deposited in a trust account
established for the benefit of the Company's public shareholders. Simultaneously
with the closing of the IPO, the Company consummated the private placement
("Private Placement") with BSG First Euro Investment Corp., the Company's
sponsor, of 292,500 units (the "Private Units") at a price of $10.00 per Private
Unit, generating total proceeds of $2,925,000. The Private Units are identical
to the Units sold in the IPO. Additionally, such initial purchasers agreed not
to transfer, assign or sell any of the Private Units or underlying securities
(except in limited circumstances, as described in the Registration Statement)
until 30 days after the completion of the Company's initial business
combination. Such initial purchasers were granted certain demand and piggyback
registration rights in connection with the purchase of the Private Units. The
Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of
1933, as amended, as the transactions did not involve a public offering.
Following the Initial Public Offering and the sale of the Private Units, a total
of $58,075,000 was placed in the Trust Account, and we had $884,500 of cash held
outside of the Trust Account, after payment of costs related to the Initial
Public Offering, and available for working capital purposes. We incurred
$4,158,799 in transaction costs, including $1,150,000 of underwriting fees,
$2,012,500 of deferred underwriting fees, the fair value of the representative
shares of $478,857, and $517,442 of other offering costs.
For the three months ended March 31, 2022, there was $132,656 of cash used in
operating activities. Net loss of $2,076,990 was offset by changes in current
assets and liabilities of $1,950,182 and interest earned on cash and marketable
securities held in Trust Account amounting to $5,848.
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For the Period from February 23, 2021 (Inception) to March 31, 2021, there was
$0 of cash used in operating activities. Net loss of $8,010 was offset by
changes in current assets and liabilities of $8,010.
As of March 31, 2022, we had $280,761 of cash on hand and working capital
deficit of $2,617,104.
We expect to incur increased expenses since becoming a public company (for
legal, financial reporting, accounting and auditing compliance), as well as
expenses in connection with the initial business combination.
We have until June 14, 2022 to consummate a business combination (or December
14, 2022 if we exercise the option to extend the date). It is uncertain that we
will be able consummate a business combination by either date. If a business
combination is not consummated by the required dates, there will be a mandatory
liquidation and subsequent dissolution. In connection with the Company's
assessment of going concern considerations in accordance with the authoritative
guidance in Financial Accounting Standards Board ("FASB") Accounting Standards
Update ("ASU") 2014-15, "Disclosure of Uncertainties About an Entity's Ability
to Continue as a Going Concern", management has determined that mandatory
liquidation, and subsequent dissolution, should the Company be unable to
complete a business combination, raises substantial doubt about the Company's
ability to continue as a going concern. If a business combination is not
consummated by this date, there will be a mandatory liquidation and subsequent
dissolution. No adjustments have been made to the carrying amounts of assets and
liabilities should the Company be required to liquidate after June 14, 2022 (or
December 14, 2022 if extended).
Based upon the above analysis, management determined that these conditions raise
substantial doubt about the Company's ability to continue as a going concern
within one year after the date the financial statements are issued.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of March 31, 2022. 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 purchased any non- financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities other than an agreement to pay our Sponsor
a monthly fee of $10,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on June 14, 2021 and will
continue to incur these fees monthly until the earlier of the completion of the
Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of
the Initial Public Offering, or $2,012,500. The deferred fee will be payable in
cash to the underwriters solely in the event that we complete a Business
Combination from the amounts held in the Trust Account, subject to the terms of
the underwriting agreement.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
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
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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, 2024 and should be
applied on a full or modified retrospective basis, with early adoption permitted
beginning on January 1, 2021. The Company is currently assessing the impact, if
any, that ASU 2020-06 would have on its financial position, results of
operations or cash flows.
Management does not believe that any other recently issued, but not yet
effective, accounting pronouncements, if currently adopted, would have a
material effect on the Company's unaudited condensed consolidated financial
statements.
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