References in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the "Report") to "we," "us" or the "Company" refer to Sports Ventures Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, references to the "Sponsor" refer to AKICV LLC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this 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

All statements other than statements of historical fact included in this Report including, without limitation, statements under this "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Report, words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.





Recent Developments

On January 25, 2022, we entered into a business combination agreement with DNEG, PF Overseas Limited, a limited liability company incorporated in Mauritius, Prime Focus 3D Cooperatief U.A., a Dutch cooperative association and our Sponsor. The Prime Focus Business Combination Agreement provided that, upon the terms and subject to the conditions thereof, the following transactions would occur as part of the Business Combination contemplated by the Prime Focus Business Combination Agreement: (i) we and the stockholders of DNEG would consummate the transfer of all of the ordinary and preferred shares of DNEG to us in exchange for Class A ordinary shares (the "Prime Focus Company Exchange"), pursuant to which we would acquire from the DNEG stockholders, and the DNEG stockholders would transfer, convey and deliver to us, all of the ordinary and preferred shares of DNEG issued and outstanding as of immediately prior to the Prime Focus Company Exchange, and each DNEG stockholder would receive, in consideration for such transfer, conveyance and delivery of each DNEG share, a number of Class A ordinary shares equal to such DNEG stockholder's portion of the consideration to which such DNEG stockholder was entitled in accordance with the Prime Focus Business Combination Agreement and (ii) effective as of the time of the Prime Focus Company Exchange, any outstanding options to purchase DNEG shares shall be exchanged for options to purchase our Class A ordinary shares, as further described in the Prime Focus Business Combination Agreement.

On June 15, 2022, the Parties entered into the Termination Agreement, pursuant to which, the Parties mutually agreed to terminate the Prime Focus Business Combination Agreement. The termination of the Prime Focus Business Combination Agreement became effective as of such date.





                                       17

As a result of the Termination Agreement, the Prime Focus Business Combination Agreement is of no further force and effect, the Parties have released all existing claims that they may presently have against one another arising out of the Prime Focus Business Combination Agreement, and the agreements entered into in connection with the Prime Focus Business Combination Agreement, including, but not limited to, (i) the amended and restated registration rights agreement, by and among us and holders set forth on Exhibit A thereto, (ii) the sponsor support agreement, by and among us, DNEG and the Sponsor, (iii) the backstop agreement, by and among us, DNEG and the Sponsor, (iv) the stockholder support agreements, (v) the PFL agreement and (vi) the subscription agreements by and among us and certain institutional and private investors, in each case as defined in the Prime Focus Business Combination Agreement, have also been terminated and are no longer be effective, as applicable, in accordance with their respective terms. In connection with the execution of the Termination Agreement, DNEG has paid a fee equal to $1,500,000 to the Sponsor.

We will consider other acquisition opportunities, however, it recognizes the existing market conditions and the limited remaining time for the Company to consummate a Business Combination, which must occur by January 5, 2023, may constrain its ability to complete an alternative transaction.





Results of Operations

We have neither engaged in any operations nor generated any revenues to date. The only activities through June 30, 2022 were organizational activities and following the initial public offering activities necessary to identifying a target company for and consummating an initial Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generated and will continue to generate non-operating income in the form of interest income on investments held in the Trust Account and will recognize unrealized gains or losses from changes in the fair values of our warrant liability. We incurred and will continue to 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 June 30, 2022, we had net income of $8,116,557 which consisted of interest earned on our investments of $304,894 and unrealized gain of $8,859,269 from the change in the fair value of our derivative warrant liabilities, partially offset by general and administrative expense of $1,047,606.

For the six months ended June 30, 2022, we had net income of $1,258,168 which consisted of interest earned on our investments of $326,763 and unrealized gain of $4,205,745 from the change in the fair value of our derivative warrant liabilities, partially offset by general and administrative expense of $3,274,340.

For the three months ended June 30, 2021, we had a net loss of $893,358 which consisted of an unrealized loss of $631,062 from the change in the fair value of our warrant liability and general administrative expenses of $270,644, partially offset by interest earned on our investments of $8,348.

For the six months ended June 30, 2021, we had net income of $3,019,054 which consisted of an unrealized gain of $4,101,216 from the change in the fair value of our warrant liability and interest earned on our investments of $18,758 partially offset by general administrative expenses of $442,918 and $658,002 of offering costs allocated to the warrant liability.





                                       18

Liquidity and Capital Resources

On January 8, 2021, we consummated our Initial Public Offering of 23,000,000 Units at $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of our Initial Public Offering, we consummated the sale of 660,000 Private Placement Units, at a price of $10.00 per Private Placement Unit. Each Private Placement Unit consists of one Class A ordinary share, and one-third redeemable warrant, each whole warrant entitling the holder to purchase one Class A ordinary share at a price of $11.50 per share, generating gross proceeds of $6,600,000.

Following the closing of our Initial Public Offering on January 8, 2021, $230,000,000 ($10.00 per Unit) from the net offering proceeds of the sale of the Units in our Initial Public Offering and the sale of the Private Placement Units was placed in the Trust Account and invested in U.S. government securities.

As of June 30, 2022, we had investments held in the Trust Account of $230,353,340 consisting of money market funds.

As of June 30, 2022, we had cash outside the Trust Account of $25,734 available for working capital needs. All investments held in the Trust Account is generally unavailable for use, prior to an initial Business Combination, and is restricted for use either in an initial Business Combination, pay tax obligations or to redeem ordinary shares.

Until consummation of an initial Business Combination, we will be using the funds not held in the Trust Account, and any additional working capital loans from the initial shareholders, our officers and directors, or their respective affiliates, 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 initial Business Combination.

For the six months ended June 30, 2022, cash used in operating activities was $474,741. Net income of $1,258,168 was impacted by an unrealized non-cash gain on the change in the fair value of our warrant liability of $4,205,745, interest earned on our Trust Account of $326,763 and cash provided in operating assets and liabilities of $2,799,599.

For the six months ended June 30, 2021, cash used in operating activities was $994,883. Net income of $3,019,054 was impacted by an unrealized non-cash gain on the change in the fair value of our warrant liability of $4,101,216, cash used in operating assets and liabilities of $551,965 and interest earned on our Trust Account of $18,758, partially offset by transaction costs allocated to the warrant liability of $658,002.With funds raised from our Initial Public Offering, we invested $230,000,000 as our investing activities.





                                       19

We raised $231,607,044 from financing activities, primarily related to the Initial Public Offering. Amounts included $229,566,057 proceeds from the sale of our public Units, net of offering costs from our Initial Public Offering and $6,600,000 proceeds from the issuance of the Private Placement Unit s, partially offset be $4,600,000 in payments for underwriting discounts.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable) to complete our initial Business Combination. We may withdraw interest from the Trust Account to pay franchise and income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We have engaged underwriters as advisors in connection with our initial Business Combination to assist us in holding meetings with our shareholders to discuss the potential Business Combination and the target business' attributes, introduce us to potential investors that are interested in purchasing our securities in connection with the potential Business Combination, assist us in obtaining shareholder approval for the initial Business Combination and assist us with our press releases and public filings in connection with the initial Business Combination. We will pay the marketing fee for such services upon the consummation of our initial Business Combination in an amount equal to, in the aggregate, 3.5% of the gross proceeds of our Initial Public Offering, including any proceeds from the full or partial exercise of the over-allotment option.

If our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial 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 initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our public shares upon completion of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.





Going Concern

In connection with our assessment of going concern considerations in accordance with FASB ASU 2014-15, management has determined that our liquidity and the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. We have until January 8, 2023 to consummate an initial Business Combination. It is uncertain that we will be able to consummate an initial Business Combination by this time. If an initial 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 or liabilities should we be required to liquidate after January 8, 2023. Management continues to evaluate potential Business Combination opportunities and will continue to do so.

Off-Balance Sheet Arrangements; Commitments and Contractual Obligations

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2022 and December 31, 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 purchased any non-financial assets.





                                       20





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 the Sponsor a total of $10,000 per month for office space, administrative and shared personnel support services.

The holders of the (i) founder shares, which were issued in a private placement prior to the closing of our Initial Public Offering, (ii) placement warrants which were issued in a private placement simultaneously with the closing of our Initial Public Offering and the placement shares underlying such placement warrants, and (iii) placement warrants that may be issued upon conversion of working capital loans will have registration rights to require us to register a sale of any of its securities held by them pursuant to a registration rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain "piggy-back" registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

On January 8, 2021, we paid a fixed underwriting discount of $0.20 per Unit, $4,600,000 in the aggregate, in connection with our Initial Public Offering. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5%, or $8,050,000, of the gross proceeds of our Initial Public Offering upon the completion of an initial Business Combination.





Risk and Uncertainties

On January 30, 2020, the World Health Organization ("WHO") announced a global health emergency because of a new strain of coronavirus (the "COVID-19 outbreak"). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on our financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, our financial position may be materially adversely affected. Additionally, our ability to complete an initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit our ability to have meetings with potential investors or affect the ability of a potential target company's personnel, vendors and service providers to negotiate and consummate an initial Business Combination in a timely manner. Our ability to consummate a Business Combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.

Our results of operations and our ability to complete a Business Combination may also be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete a Business Combination.





Critical Accounting Policies



Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP 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 policies.





                                       21

Derivative 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 ASC 480 and 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 our own ordinary shares and whether the holders of the Warrants could potentially require "net cash settlement" in a circumstance outside of our 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 unaudited condensed statements of operations.

Class A Ordinary Shares subject to Possible Redemption

We account for Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480 "Distinguishing Liabilities from Equity." Class A ordinary shares subject to mandatory redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders' deficit. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of June 30, 2022 and December 31, 2021, 23,000,000 shares of Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders' deficit section of our condensed balance sheets.

Net Income (Loss) per Ordinary Share

We have 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 7,886,667 potential ordinary shares for outstanding warrants to purchase our shares were excluded from diluted earnings per share for the three and six months ended June 30, 2022 and 2021 because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income (loss) per ordinary share is the same as basic net income (loss) per ordinary share for the periods presented.

Recent Accounting Pronouncements

Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.

Factors That May Adversely Affect our Results of Operations

Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.


                                       22

© Edgar Online, source Glimpses