The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report on Form 10-K.
Certain information contained in the discussion and analysis set forth below
includes forward-looking statements. Our actual results may differ materially
from those anticipated in these forward-looking statements as a result of many
factors, including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form
10-K.
Overview
We are a blank check company incorporated on January 5, 2021 as a Cayman Islands
exempted company for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses or entities. We have not selected any 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 our initial public offering and the sale of the private
placement shares (as defined below), our shares, debt or a combination of cash,
equity 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 inception through December 31, 2022 were organizational
activities, those necessary to prepare for the initial public offering,
described below, and, after the initial public offering, 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 investments 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 in connection with completing a business combination.
For the year ended December 31, 2022, we had a net income of $5,799,872, which
consists of interest income on investments held in the trust account of
$6,491,218 offset by general and administrative expenses of $691,346. For the
period from January 5, 2021 (inception) through December 31, 2021, we had a net
loss of $977,239, which consists of general and administrative expenses of
$1,013,555, offset by interest income on investments held in the trust account
of $36,316.
Liquidity and Capital Resources
On March 12, 2021, we consummated the initial public offering of 45,000,000
Class A ordinary shares, at $10.00 per Public Share, generating gross proceeds
of $450,000,000. Simultaneously with the closing of the Initial Public Offering,
we consummated a private placement with our Sponsor of 1,100,000 Class A
ordinary shares at a price of $10.00 per share, generating gross proceeds of
$11,000,000 (the "private placement shares").
For the year ended December 31, 2022, cash used in operating activities was
$419,248. Net income of $5,799,872 was affected by interest earned on
investments held in the trust account of $6,491,218. Changes in operating assets
and liabilities provided $272,098 of cash for operating activities.
For the period from January 5, 2021 (inception) through December 31, 2021, cash
used in operating activities was $1,144,887. Net loss of $977,239 was affected
by interest earned on investments held in the trust account of $36,316 and
formation cost of $5,000. Changes in operating assets and liabilities used
$136,332 of cash for operating activities.
As of December 31, 2022, we had investments held in the trust account of
$456,527,534 (including $6,527,534 of interest income in the aggregate). As of
March 9, 2023, after the Extension was approved at our annual general meeting,
$419,974,456 was distributed from the trust account for distributions to
shareholders that requested redemption of their Class A ordinary shares, leaving
a balance of $39,927,973 in the trust account. We may withdraw interest from the
trust account to pay taxes, if any. 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 income taxes payable), to complete our
Business Combination. To the extent that our share capital or debt is used, in
whole or in part, as consideration to complete our 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.
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As of December 31, 2022, we had cash of $107,902 held outside of the trust
account. We intend to use the funds held outside the trust account primarily to
identify and evaluate target businesses, perform business due diligence on
prospective target businesses, travel to and from the offices, plants or similar
locations of prospective target businesses or their representatives or owners,
review corporate documents and material agreements of prospective target
businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with a business combination, our sponsor or an affiliate of our
sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. On March 18, 2022, we entered into a working
capital loan agreement with our sponsor, pursuant to which we may borrow up to
$300,000, for ongoing business expenses. As of December 31, 2022, we had
$300,000 outstanding borrowings under the working capital loan agreement. On
March 23, 2023, we entered into a working capital loan agreement with our
sponsor, pursuant to which we may borrow up to $500,000, for ongoing business
expenses. As of the date of this annual report, we had $250,000 of outstanding
borrowings under the working capital loan agreement. If we complete a business
combination, we may repay such loaned amounts out of the proceeds of the trust
account released to us. In the event that a business combination does not close,
we may use a portion of the working capital held outside the trust account to
repay such loaned amounts, but no proceeds from our trust account would be used
for such repayment. If we complete a business combination, we may repay such
loaned amounts out of the proceeds of the trust account released to us. In the
event that a business combination does not close, we may use a portion of the
working capital held outside the trust account to repay such loaned amounts, but
no proceeds from our trust account would be used for such repayment.
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, we may need to obtain additional
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.
Going Concern
Although we have a working capital deficit of $327,864 as of December 31, 2022,
the Working Capital Loan will provide sufficient capital up to $1,500,000, if
necessary, to help sustain operations for one year from the issuance date of the
financial statements, or until the completion of the Business Combination.
$300,000 was outstanding on the Working Capital Loan as of December 31, 2022,
leaving a capacity of $1,200,000. On March 23, 2023, we entered into a working
capital loan agreement with our sponsor, pursuant to which we may borrow up to
$500,000, for ongoing business expenses. As of the date of this annual report,
we had $250,000 of outstanding borrowings under the working capital loan
agreement. If we complete a business combination, we may repay such loaned
amounts out of the proceeds of the trust account released to us. In the event
that a business combination does not close, we may use a portion of the working
capital held outside the trust account to repay such loaned amounts, but no
proceeds from our trust account would be used for such repayment. In connection
with our assessment of going concern considerations in accordance with FASB ASU
2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as
a Going Concern," we have determined that the date for mandatory liquidation and
dissolution raise substantial doubt about our ability to continue as a going
concern through March 12, 2024, our scheduled liquidation date if we do not
complete a business combination prior to such date (unless our board of
directors determines that it is in our best interests to liquidate at an earlier
date). We intend to complete a Business Combination by March 12, 2024, but
cannot guarantee such event.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 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 an
affiliate of our Sponsor a monthly fee of $10,000 for office space,
administrative and support services. We began incurring these fees on March 9,
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 $0.35 per Public Share, or
$15,750,000 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.
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Critical Accounting Estimates
The preparation of the 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.
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