References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to SHUAA Partners Acquisition Corp I. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to SHUAA SPAC Sponsor I LLC, a Cayman Islands
limited liability company. The following discussion and analysis of the
Company's financial condition and results of operations should be read in
conjunction with the financial statements and the notes thereto contained
elsewhere in this Quarterly Report. Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that
involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
are not historical facts and involve risks and uncertainties that could cause
actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its Initial Public
Offering filed with the SEC. 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 in the Cayman Islands on August 24,
2021 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or other similar Business
Combination with one or more businesses. We intend to effectuate our Business
Combination using cash derived from the proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, our shares, debt or a
combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to
date. Our only activities from August 24, 2021 (inception) through September 30,
2022 were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and identifying a target company for a
Business Combination. We do not expect to generate any operating revenues until
after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We incur expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due
diligence expenses.
For the three months ended September 30, 2022, we had net income of $277,755,
consisting of interest on investment held in the Trust Account of $503,557,
offset by general and administrative costs of $225,802, comprised primarily of
insurance expenses of $112,300, professional fees of $42,842 and administrative
services fees of $30,000.
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For the nine months ended September 30, 2022, we had net loss of $446,365,
consisting of general and administrative costs of $1,115,663, comprised
primarily of stock-based compensation costs of $560,000, insurance expenses of
$260,000, filing fees of $90,631, administrative services fees of $70,000 and
professional fees of $111,764; such costs were partially offset by interest on
investment held in the Trust Account of $669,298.
Liquidity, Capital Resources and Going Concern
On March 4, 2022, we completed the Initial Public Offering of 10,000,000 Units,
at $10.00 per Unit, generating gross proceeds of $100,000,000. Subsequently, on
March 7, 2022, the underwriters partially exercised their option to purchase up
to 1,500,000 additional Units, and on March 8, 2022 we consummated the issuance
and sale of 865,000 Over-Allotment Units, at $10.00 per Unit, generating
additional gross proceeds of $8,650,000. Simultaneously with the closing of the
Initial Public Offering, we completed the sale of 7,265,000 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant in private
placements, of which (i) 6,765,000 Private Placement Warrants were purchased by
the Sponsor, (ii) 460,000 Private Placement Warrants were purchased by BTIG and
(iii) 40,000 Private Placement Warrants were purchased by IBS, generating gross
proceeds of $7,265,000. Subsequently, on March 8, 2022, simultaneously with the
issuance and sale of the Over-Allotment Units, we consummated the sale of an
additional 389,250 Private Placement Warrants at a price of $1.00 per Private
Placement Warrant, of which (i) 346,000 Private Placement Warrants were
purchased by the Sponsor, (ii) 39,790 Private Placement Warrants were purchased
by BTIG and (iii) 3,460 Private Placement Warrants were purchased by IBS,
generating gross proceeds of $389,250.
Following the Initial Public Offering, the partial exercise of the
over-allotment option, and the sale of the Private Placement Warrants, a total
of $111,373,823 was placed in the Trust Account. We incurred $7,385,475 in
Initial Public Offering related costs, including $2,173,000 of underwriting
fees, $4,346,000 of deferred underwriting fees and $866,475 of other offering
costs.
For the nine months ended September 30, 2022, net cash used in operating
activities was $1,361,417. The net loss of $446,365, consisted of operating
costs paid by related party under promissory note of $393, stock-based
compensation of $560,000, offset by interest earned on investments held in Trust
Account of $669,298 and changes in operating assets and liabilities used
$806,147 of cash from operating activities.
As of September 30, 2022, we had cash outside our Trust Account of $867,746 and
had working capital of $1,290,097. All remaining cash from the Initial Public
Offering is held in the Trust Account and is generally unavailable for use prior
to an initial Business Combination. In addition, in order to finance transaction
costs in connection with a Business Combination, our Sponsor or an affiliate of
the Sponsor or certain of our officers and directors may, but are not obligated
to, provide us Working Capital Loans. As of September 30, 2022, there were no
amounts outstanding under any Working Capital Loans.
Based on the foregoing, management believes that we 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, we 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. However, if
our estimates of the costs of identifying a target business, undertaking
in-depth due diligence and negotiating a Business Combination are less than the
actual costs of such actions, we may have insufficient funds available to
operate its business prior to its initial Business Combination. Moreover, in
such event, we would need to raise additional capital through loans from its
Sponsor, officers, directors or third parties. None of the Sponsor, officers or
directors are under any obligation to advance funds to, or to invest in, us. If
we are unable to raise additional capital, it may be required to take additional
measures to conserve liquidity, which could include, but not necessarily be
limited to, curtailing operations, suspending the pursuit of its business plan,
or reducing overhead expenses. We cannot provide any assurance that new
financing will be available to it on commercially acceptable terms, if at all.
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We have until 15 months (or up to 21 months if we extend the period of time to
consummate our initial Business Combination) from the closing of our IPO to
consummate our initial Business Combination (the "Combination Period").
Accordingly, the Combination Period will conclude on June 4, 2023, unless
extended to a latest possible date of December 4, 2023. If we are not able to
consummate a Business Combination before June 4, 2023 (absent any extensions of
such period by the Sponsor), we will commence an automatic winding up,
dissolution and liquidation. Management has determined that the automatic
liquidation, should a Business Combination not occur, and potential subsequent
dissolution, also raise substantial doubt about our ability to continue as a
going concern. While management intends to complete a Business Combination on or
before June 4, 2023 (absent any extensions of such period by the Sponsor), it is
uncertain whether we will be able to do so. No adjustments have been made to the
carrying amounts of assets or liabilities should we be required to liquidate
after June 4, 2023 (absent any extensions of such period by the Sponsor).
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 the Sponsor a
monthly fee of $10,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on March 1, 2022 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 $0.40 per Unit, or $4,346,000
in the aggregate. 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.
Critical Accounting Estimates
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have not identified any critical accounting estimates other than
those described in Note 2 to condensed financial statements.
Recent Accounting Standards
Other than described in Note 2 to condensed financial statements, management
does not believe that any recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on our condensed
financial statements.
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