UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2024
OR
For the transition period from to
Commission File No. 001-41041
(Exact name of registrant as specified in its charter)
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Applicable |
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of Principal Executive Offices, including zip code)
(617 ) 874-5152
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class:
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Trading Symbol(s)
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Name of Each Exchange on Which Registered:
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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 Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate 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.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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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 Rule 12b-2 of the Exchange Act): Yes ☒ No ☐
As of November 13, 2024, 5,798,092 Class A ordinary shares, $0.0001 par value, and 3 Class B ordinary shares, $0.0001 par value, were issued and outstanding.
DP CAP ACQUISITION CORP I
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024
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DP CAP ACQUISITION CORP I
CONDENSED BALANCE SHEETS
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SEPTEMBER 30, 2024
(Unaudited)
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DECEMBER 31, 2023
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ASSETS
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Cash
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$
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$
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Prepaid expenses
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Total current assets
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Cash (investments) held in Trust Account
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Total Assets
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$
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$
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LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses
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Total current liabilities
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Deferred underwriting fees payable
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Total liabilities
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Commitments and Contingencies (Note 5)
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Class A ordinary shares subject to possible redemption, $
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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
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Accumulated deficit
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(
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)
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(
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)
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Total shareholders’ deficit
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(
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(
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)
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Total Liabilities, Ordinary Shares
Subject to Possible Redemption, and Shareholders’ Deficit
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$
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$
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The accompanying notes are an integral part of these unaudited condensed financial statements.
DP CAP ACQUISITION CORP I
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For The Three
Months Ended
September 30,
2024
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For The Three
Months Ended
September 30,
2023
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For The Nine
Months Ended
September 30, 2024
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For The Nine
Months Ended
September 30, 2023
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General and administrative expenses
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$
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$
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$ | $ | ||||||||||
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Loss from operations
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(
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)
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(
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)
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( |
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Earnings on cash (investments) held in Trust Account
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Net income (loss)
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$
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$
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$ | ( |
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Weighted average shares outstanding of Class A ordinary shares subject to possible redemption, basic
and diluted
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Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible
redemption
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$
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$
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$ | ( |
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Weighted average shares outstanding of non-redeemable ordinary shares, basic and diluted
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Basic and diluted net income (loss) per share, non-redeemable ordinary shares
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$
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$
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$ | ( |
) | $ | ||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
DP CAP ACQUISITION CORP I
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
(UNAUDITED)
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Non-Redeemable Ordinary Shares
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||||||||||||||||||||||||||||
| Class A | Class B | |||||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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Additional Paid-
In Capital
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Accumulated
Deficit
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Total Shareholders’
Deficit
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||||||||||||||||||||||
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Balance as of January 1, 2024
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$
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$
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$
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(
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)
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$
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(
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)
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|||||||||||||||
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Conversion of Class B ordinary shares to Class A ordinary shares
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( |
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Capital contribution made by Sponsor for non-redemption agreement
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- | - | ||||||||||||||||||||||||||
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Cost of raising capital related to shareholder non-redemption agreements
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- | - | ( |
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Redemption of Class A ordinary shares
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Remeasurement of Class A ordinary shares to redemption value
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- |
- |
( |
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Extension deposits due from Sponsor
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- | - | ||||||||||||||||||||||||||
| Net loss |
- | - | ( |
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Balance as of March 31, 2024 (unaudited)
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$ | $ | $ | $ | ( |
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Capital contribution from Sponsor
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- | - | - | |||||||||||||||||||||||||
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Remeasurement of Class A
ordinary shares to redemption value
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- |
- | - |
- | - | ( |
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Extension deposit paid into Trust Account
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- |
- | - |
- | ( |
) | ( |
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| Net loss |
- | - | ( |
) | ( |
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Balance as of June 30, 2024 (unaudited)
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$
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$
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$
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$
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(
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$
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(
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Extension deposit paid into Trust Account
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- |
- | - |
( |
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Remeasurement of
Class A ordinary shares to redemption value
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- | - | ( |
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Capital contribution from Sponsor
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- | - | - | |||||||||||||||||||||||||
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Net income
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- | - | ||||||||||||||||||||||||||
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Balance as of September 30, 2024 (unaudited)
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$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
DP CAP ACQUISITION CORP I
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
(Unaudited)
| Non-Redeemable Ordinary Shares | ||||||||||||||||||||||||||||
| Class A | Class B | |||||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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Additional Paid-
In Capital
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Accumulated
Deficit
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Total Shareholders’
Deficit
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||||||||||||||||||||||
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Balance as of January 1, 2023
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$
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$
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$
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(
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)
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$
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(
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Remeasurement of Class A ordinary shares to redemption value
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- | - | - | ( |
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| Net income | - | - | ||||||||||||||||||||||||||
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Balance as of March 31, 2023 (unaudited)
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$
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$
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$
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$
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(
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)
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$
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(
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)
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Remeasurement of Class A
ordinary shares to redemption value
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- | - | - | ( |
) | ( |
) | |||||||||||||||||||||
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Capital contribution made by Sponsor for non-redemption agreements
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- | - | - | - | - | |||||||||||||||||||||||
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Cost of raising capital related to shareholder non-redemption agreements
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- | - | - | - | ( |
) | - | ( |
) | |||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
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Balance as of June 30, 2023
(unaudited)
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$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
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Remeasurement of Class A ordinary shares to redemption value
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- | - | - | ( |
) | ( |
) | |||||||||||||||||||||
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Net income
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- | - | ||||||||||||||||||||||||||
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Balance as of September 30, 2023 (unaudited)
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$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
The
accompanying notes are an integral part of these unaudited condensed financial statements.
DP CAP ACQUISITION CORP I
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
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FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, 2024
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FOR THE NINE
MONTHS ENDED
SEPTEMBER 30, 2023
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Cash Flows from Operating Activities
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Net (loss) income
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$
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(
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)
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$
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Adjustments to reconcile net (loss) income to net cash used in operating activities:
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Earnings on cash (investments) held in Trust Account
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(
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)
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(
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)
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Changes in operating assets and liabilities:
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Prepaid expenses
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(
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)
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Accounts payable
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Accrued expenses
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Net cash used in operating activities
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(
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)
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(
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)
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Cash Flows from Investing Activities
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Extension deposits into Trust Account
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(
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)
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Trust Account Withdrawal - redemption
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Net cash provided by investing activities
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Cash Flows from Financing Activities
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Redemption of Public Shares
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(
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)
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(
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Capital contribution from Sponsor
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Net cash used in financing activities
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(
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)
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(
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)
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||||
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||||||||
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Net decrease in cash
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(
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)
|
(
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)
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||||
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Cash - beginning of period
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||||||
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Cash - end of period
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$
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$
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||||
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Supplemental disclosure of noncash investing and financing activities:
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||||||||
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Remeasurement of Class A ordinary shares to redemption value
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$
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$
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||||
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Capital contribution made by Sponsor for non-redemption agreement
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$
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|
$
|
|
||||
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Cost of raising capital contribution made by Sponsor for non-redemption agreement
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$
|
(
|
)
|
$
|
(
|
|||
|
Conversion of Class B ordinary shares to Class A ordinary shares
|
$
|
|
$
|
|
||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
DP CAP ACQUISITION CORP I
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization and General
DP
Cap Acquisition Corp I (the “Company”) is a blank check company incorporated in the Cayman Islands on April 8, 2021. The Company was 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 (the “Business Combination”). 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, 2024, the Company had not commenced any operations. All activity for the period from April 8, 2021 (inception) through September 30, 2024 relates to the Company’s formation and the Public Offering (as defined below) and subsequent to the Public
Offering, the search for a target for the Company’s Business Combination. The Company will not generate any operating revenues until after the completion of its Business Combination, at the earliest. The Company will generate non-operating
income in the form of earnings on cash (investments) held in Trust Account relating to the proceeds derived from the Public Offering on November 12, 2021 (“Public Offering” or “IPO”). The Company has selected December 31 as its fiscal year end.
On November 12, 2021, the Company consummated its Public Offering of 23,000,000
units (the “Units”), which included the exercise in full of the underwriter’s option to purchase an additional 3,000,000 Units at
the Public Offering price to cover over-allotments. Each Unit consists of one Class A ordinary share, par value $0.0001 per share (the “Class A Ordinary Shares”), and of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share at an exercise price of $11.50 per share, subject to adjustment. The
Units were sold at a price of $10.00 230.0 million, which is described in Note 3.
Simultaneously
with the closing of the Public Offering, the Company completed the private sale of 4,733,333 warrants (the “Private Placement
Warrants”) at a purchase price of $1.50 per Private Placement Warrant (the “Private Placement”), to DP Investment Management Sponsor I
LLC (the “Sponsor”), generating gross proceeds to the Company of $7,100,000 , which is described in Note 4. Each Private Placement
Warrant entitles the holder to purchase one Class A Ordinary Share at an exercise price of $11.50 per share.
Simultaneously with the closing of the IPO, pursuant to the Sponsor’s promissory note (the “Sponsor Note”), the Sponsor loaned $4,600,000
to the Company (the “Sponsor Loan”) at no interest. The proceeds of the Sponsor Note were deposited into the Trust Account (described
below) and will be repaid or converted into warrants (the “Sponsor Loan Warrants”) at a conversion price of $1.50 per Sponsor Loan Warrant, at the Sponsor’s discretion and at any time
until the consummation of the Company’s Business Combination. The Sponsor Loan Warrants are identical to the Private Placement Warrants.
Transaction costs amounted to $13,148,152 , including $8,050,000 in deferred underwriting fees, $4,600,000 in paid underwriting fees and $498,152 in other offering costs. Upon completion of the Public Offering, cash of $2,030,974 was held outside of the Trust Account (as defined below) for the payment of offering costs and for working capital purposes. Offering costs were allocated between
the Class A Ordinary Shares, Public Warrants and Private warrants using the relative fair value method.
A total of $234,600,000 ($10.20 per unit), which
consisted of $225,400,000 of the net proceeds from the IPO, $4,600,000 of the proceeds of the sale of the Private Placement Warrants and $4,600,000
of the proceeds from a loan by the Sponsor under the Sponsor Loan, was placed in a U.S.-based Trust Account maintained by Continental Stock Transfer & Trust Company, acting as trustee. Except with respect to interest earned on the funds in the
Trust Account (the “Trust Account”) that may be released to the Company to pay its taxes and winding up and dissolution expenses, the funds held in the Trust Account will not be released from the Trust Account until (i) the completion of the
Company’s Business Combination, or (ii) the redemption of any of the Company’s public shares properly tendered in connection with a shareholder vote to amend the Company’s fourth amended and restated memorandum and articles of association (the
“Fourth A&R M&A”) to (A) modify the substance or timing of its obligation to provide holders of its Class A Ordinary Shares the right to have their shares redeemed in connection with the Company’s Business Combination or to redeem 100 % of the Company’s public shares if it does not complete its Business Combination by November 12, 2025 (the “Extended Combination Period”) or (B)
with respect to any other provision relating to shareholders’ rights or pre-business combination activity, and (iii) the redemption of the Company’s public shares if it is unable to complete its Business Combination within the Extended Combination
Period, subject to applicable law. See discussion below regarding the extensions of the combination period.
The Company’s management has broad discretion with respect to the specific
application of the net proceeds of the Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance
that the Company will be able to complete a Business Combination successfully. The Company must complete one or more Business Combinations having an aggregate fair
market value of at least 80 % of the net assets held in the Trust Account (excluding the amount of deferred underwriting discounts held in the Trust Account and taxes
payable on the income earned on the Trust Account) at the time of the agreement to enter into a Business Combination. However, the Company only intends to complete a Business Combination if the post-transaction company owns or acquires 50 % or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be
required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment Company Act”). Upon the closing of the Public Offering, management agreed that an amount equal to at least $10.20 per Unit sold in the Public Offering, would be held in a Trust Account located in the United States with Continental Stock Transfer & Trust Company acting as
trustee, and invested only in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7
promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust
Account as described below. On November 7, 2023, in order to mitigate the potential risks of being deemed to have been operating as an unregistered investment company for purposes of the Investment Company Act, the Company entered into an amendment
to the investment management trust agreement by and between the Company and Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account (“Continental”), to allow for Continental to hold all funds in the Trust
Account uninvested or in cash in an interest-beraing bank demand deposit account. On the same day, the Company instructed Continental to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account and to hold
all funds in the Trust Account in cash in an interest-bearing demand deposit account until the earlier of: (i) the completion of a Business Combination, or (ii) the distribution of the Trust Account as described below.
The Company is required to provide the holders (the “Public Shareholders”) of the Company’s issued and outstanding Class A Ordinary Shares, par value $0.0001 per share, sold in the Public Offering (the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in
connection with a shareholders meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer
will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially $10.20 per Public Share). The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred
underwriting commissions the Company will pay to the underwriters (as discussed in Note 6, Commitments and Contingencies). These Public Shares were recorded at a redemption value and classified as
temporary equity upon the completion of the Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity.” If the Company
seeks shareholder approval, the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not decide to
hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Fourth A&R M&A, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file
tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or legal reasons, the
Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem its Public Shares
irrespective of whether such Public Shareholder votes for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holders of the Founder Shares (as defined below in Note 5)
(“the initial shareholders”) have agreed to vote their Founder Shares and any Public Shares purchased during or after the Public Offering in favor of a Business Combination. In addition, the initial shareholders have agreed to waive their
redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The
Fourth A&R M&A
provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15 % of the Public Shares,
without the prior consent of the Company. The initial shareholders have agreed not to propose an amendment to the Fourth A&R M&A (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with a Business Combination
or to redeem 100 % of the Public Shares if the Company does not complete a Business Combination within the Extended Combination Period or (B) with
respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares in conjunction with any such
amendment.
If the Company is unable to complete a Business Combination by November 12, 2025 and the Company’s shareholders have not amended the Fourth
A&R M&A to extend such combination period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than business days thereafter subject to lawfully available funds therefor, redeem the Public Shares, at a 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 $100,000
of interest to pay dissolution expenses) divided by the number of the then outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in each
case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. As of the date of filing this Quarterly Report on Form 10-Q, the Company has not entered into any
non-binding or definitive agreements with a potential Business Combination target.
The initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company
fails to complete a Business Combination within the Extended Combination Period. However, if the initial shareholders acquire Public Shares after the Public Offering (other than by converting Founder Shares into Public Shares), they will be
entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Extended Combination Period. The underwriters have agreed to waive their rights to
the deferred underwriting commission (see Note 6, Commitments and Contingencies) held in the Trust Account in the event the Company does not complete a Business Combination within the Extended Combination Period and, in such event, such amounts
will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining
available for distribution (including Trust Account assets) will be only $10.20 . In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or by a
prospective target business with which the Company has discussed entering into a transaction agreement (a “Target”), reduce the amount of funds in the Trust Account to below (i) $10.20 per Public Share or (ii) the lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the
value of the trust assets, in each case net of interest which may be withdrawn to pay taxes. Such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to seek access to the Trust Account.
Such liability will also not apply to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). In
the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the
Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses or other
entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
Non-Redemption Agreements, Extension Deposits and
Extraordinary General Meetings
On May 5, 2023, certain of the Company’s unaffiliated investors (the “Investors”)
entered into non-redemption agreements (“Non-Redemption Agreements”) with the Sponsor, pursuant to which the Investors agreed to (i) not redeem an aggregate of up to 4,000,000 previously-held Class A Ordinary Shares (the “Investor Shares”) in connection with the First Extension (as defined below) and (ii) vote the Investor Shares in
favor of the First Extension. In exchange for these commitments from the Investors, the Sponsor has agreed to transfer to the Investors, in each case on or promptly after the consummation of the Business Combination: (i) an aggregate of up to 1,000,000 Class B ordinary shares in connection with an extension until November 12, 2023 (the “Original Extension”) and (ii) to the extent the
Company’s board of directors agrees to further extend the date up to three times by an additional month each time until February 12, 2024 to consummate its Business Combination, an aggregate of up to 1,500,000 Class B ordinary shares (each an “Optional Extension”), which includes the Class B ordinary shares referred to in clause (i). As of December 31, 2023, in
connection with the Original Extension and the first and second Optional Extensions, the Sponsor agreed to transfer to the Investors an aggregate of 1,333,324
Class B ordinary shares promptly after the consummation of the Business Combination. The excess of the fair value of the Class B ordinary shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A.
Subsequently, in connection with the third Optional Extension which was approved by the Company’s board of directors on January 8, 2024 (as discussed below), the Sponsor agreed to transfer an additional 166,662 Class B ordinary shares, in the aggregate, to the Investors, amounting to a total aggregate amount of 1,500,000 Class B ordinary shares to be transferred to the Investors by the Sponsor on or promptly after the consummation of the Business Combination pursuant to the
Non-Redemption Agreements. See Notes 2 and 6, Non-Redemption Agreements.
On May 10, 2023, the Company held an extraordinary general meeting of shareholders (the “First Extraordinary General Meeting”) at which the Company’s shareholders voted to
approve, by special resolution, the proposal to amend and restate the Company’s amended and restated memorandum and articles of association (the “Second A&R M&A”), to extend the date (the “Extension Date”) by which the Company must
(1) consummate the Business Combination, (2) cease its operations except for the purpose of winding up if it fails to complete such Business Combination, and (3) redeem all of the Class A Ordinary Shares included as part of the Units sold in
the Company’s IPO, from May 12, 2023 to November 12, 2023, with optional additional extensions of up to three times by an
additional month each time, at the option of the Company’s board of directors, until February 12, 2024 (the “First Extension”). In connection with the First Extension, shareholders holding 18,940,598 Class A Ordinary Shares exercised their right to redeem such shares at a per share redemption price of approximately $10.51 . As a result, approximately $199.0 million was removed from the Company’s Trust Account to
pay such holders. Following these redemptions, the Company has 4,059,402 Class A Ordinary Shares with redemption rights
outstanding.
On November 8, 2023, the Company’s board of directors approved the extension of the date by which the Company is required to complete the
Business Combination until December 12, 2023. On December 8, 2023, the Company’s board of directors approved the extension of the date by which the Company is required to complete the Business Combination from December 12, 2023 until
January 12, 2024. On January 8, 2024, the Company’s board of directors approved the extension of the date by which the Company is required to complete an initial business combination from January 12, 2024 until February 12, 2024.
On February 8, 2024, the Company held a second extraordinary general meeting of shareholders (the “Second Extraordinary General Meeting”) at
which the Company’s shareholders approved, by special resolution, a proposal to amend and restate the Company’s Second A&R M&A to extend the Extension Date from February 12, 2024 to November 12, 2024 (the “Second Extension”). In
connection with the Second Extraordinary General Meeting, holders of an additional 2,559,402 Class A Ordinary Shares properly
exercised their right to redeem their Class A Ordinary Shares for cash at a redemption price of approximately $10.96 per share.
As a result, on February 13, 2024, an aggregate of approximately $28 million was removed from the Company’s Trust Account to pay
such holders. Following this redemption, the Company has 1,500,000 Class A Ordinary Shares with redemption rights outstanding.
As of September 30, 2024,
approximately $17 million remained in the Trust Account.
In connection with the approval of the Second Extension, the Sponsor has agreed to deposit on a monthly basis, or pro rata portion thereof if less than a month, $
Share Conversion
Pursuant to the terms of the Third A&R M&A, on February 9, 2024, the Initial Shareholders elected to convert an aggregate of5,749,997
Class B Ordinary Shares on a one-for-one basis into Class A Ordinary Shares (such shares, the “Converted Shares”). The initial
shareholders will not have any redemption rights or be entitled to liquidating distributions from the Trust Account in connection with the Converted Shares if the Company fails to consummate a Business Combination, and the Converted Shares
will be subject to the restrictions on transfer pursuant to the letter agreement entered into by and between the initial shareholders and the Company in connection with the IPO. Following such conversion, an aggregate of 7,249,997 1,500,000
Pursuant to the terms of the Third A&R M&A, on February 9, 2024, the Initial Shareholders elected to convert an aggregate of
Nasdaq Compliance
On August 21, 2023, the Company received a letter from the Listing Qualifications staff (the “Nasdaq Staff”) of The Nasdaq Stock Market LLC
(“Nasdaq”) notifying the Company that the Company is not in compliance with Nasdaq Listing Rule 5450(b)(2)(A), which requires that the Company’s listed securities maintain a minimum Market Value of Listed Securities (“MVLS”) of $50 million
(the “MVLS Rule”). Subsequently on March 11, 2024, the Nasdaq Staff notified the Company that the Company has regained compliance with the MVLS Rule. On October 12, 2023, the Company received a second letter from the Nasdaq Staff notifying
the Company that the Company is not in compliance with Nasdaq Listing Rule 5450(a)(2), which requires that the Company maintain a minimum of 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders
Rule”). To resolve the deficiencies and regain compliance with the Nasdaq continued listing requirements, the Company submitted an application to Nasdaq for a transfer from The Nasdaq Global Market to The Nasdaq Capital Market on January 24,
2024, which was approved by the Nasdaq on March 26, 2024. See Note 11 - Subsequent Event for a description of the delisting notice the Company received from the Nasdaq Staff on November 12, 2024.
Liquidity and Going Concern
In connection with the assessment of going concern considerations in accordance with the FASB ASC Subtopic 205-40, “Presentation of Financial Statements- Going Concern,” as a result of the Third Extension, the Company has until November 12, 2025 to consummate a Business Combination. It is currently uncertain that the Company will be able to consummate a Business Combination by this time. If its Business Combination cannot be completed prior to November 12, 2025, the Company will cease operations except for the purpose of winding-up, redeem the Company’s then outstanding public shares, and liquidate and dissolve unless, prior to such date, the Company receives an extension approval from its shareholders and elects to further extend the date on which a Business Combination must be consummated.
As of September 30, 2024, the working capital deficit is $1,084,165 . The current cash position from the net proceeds of the Public Offering, the sale of the Private Placement Warrants and the Sponsor Loan not being held in the
Trust Account are insufficient to allow us to operate until November 12, 2025, and, as such, the Company will likely depend on capital calls and or loans from our Sponsor, its affiliates or members of the Company’s management team to fund our
search, and to complete a Business Combination. The Sponsor, its affiliates, or members of the Company’s management team are not under any obligation to advance additional funds to, or to invest in, and the Company may still need additional capital
to fund its working capital needs and search for a target. Also, if the Company’s estimate of the costs of undertaking in-depth due diligence and negotiating the Business Combination is less than the actual amount necessary
to do so, the Company may need to obtain funding sooner. The Company’s working capital has not been determined to be sufficient to fund its operations for at least one year from the date of issuance of the unaudited condensed financial
statement. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern for one year from the date of these financial statements.
The Company plans to continue its search for a target and continue to pursue all options to complete a Business Combination by November
12, 2025. The Sponsor is not under any obligation to advance additional funds to, or to invest in, the Company, and the Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at
all. If the Company is unable to raise additional funds 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, and reducing overhead expenses, all of which would have a material adverse effect on the Company and its financial statements.
These unaudited condensed financial
statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, 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 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 comparison of the Company’s financial statements with 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.
NOTE 2 – SUMMARY OF 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 period financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated under the Securities Act. 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.
The
accompanying unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K/A for the period ended December 31, 2023, as filed
with the SEC on April 10, 2024. The accompanying unaudited condensed balance sheet as of December 31, 2023 has been derived from the audited financial statements included in the Annual Report on Form 10-K/A. The interim results for the
three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the period ending December 31, 2024 or for any future periods.
Risks and Uncertainties
Various social and political circumstances in the United States and around the world (including wars and other forms of conflict, including rising trade
tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the United States and foreign, trade, economic and other policies with other countries, terrorist acts, security operations and
catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics) may contribute to increased market volatility and economic uncertainties or deterioration in the United States and worldwide. This
market volatility could adversely affect the Company’s ability to complete a Business Combination. In response to the conflict between nations, the United States and other countries have imposed sanctions or other restrictive actions
against certain countries. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete a business combination
and the value of the Company’s securities.
Management continues to evaluate the impact of these types of risks on the industry and has concluded that while it is reasonably possible that these types of
risks could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial
statements. The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management has broad discretion with respect to the specific application of the net
proceeds of the Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the
Company will be able to complete a Business Combination successfully. See Note 1 (Liquidity and Going Concern).
Use of Estimates
The preparation of the condensed financial statements in conformity with U.S. 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 condensed financial statements and the reported amounts of income and expenses during the reporting period.
Making estimates requires management to exercise significant judgement. 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 condensed financial statements, which management considered in formulating its estimates, could change in the near term. Accordingly, the actual results could differ
significantly from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash
equivalents are recorded at cost, which approximates fair value. The Company had no
Cash (Investments) Held in Trust Account
The Company’s investments have consisted of a portfolio of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, each with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments
held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities and are recognized at fair value. When the Company’s investments held in the Trust Account are comprised of money
market funds, the investments are recognized at fair value. Gains and losses resulting from the change in fair value of these securities are included in earnings on (cash) investments held in the Trust Account in the unaudited condensed
statements of operations. On November 8, 2023, in order to mitigate the potential risks of being deemed to have been operating as an unregistered investment company for purposes of the Investment Company Act, the Company instructed
Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account and to hold all funds in the Trust
Account in cash in an interest-bearing demand deposit account until the earlier of the consummation of the Company’s Business Combination or liquidation.
As of September 30, 2024 and December 31, 2023, the funds held in the Trust Account were cash held in an interest-bearing demand deposit account.
Fair Value of Financial Instruments
The Company follows the guidance in ASC 820, “Fair Value Measurement” for its financial assets and liabilities that
are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection
with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities,
the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient
frequency and volume to provide pricing information on an ongoing basis.
|
|
Level 2:
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Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in
markets that are not active.
|
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Level 3:
|
Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
|
In some
circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based
on the lowest level input that is significant to the fair value measurement.
Net (Loss) Income Per Ordinary Share
The Company follows the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net (loss) income
per share is computed by dividing net (loss) income by the weighted-average number of Class A Ordinary Shares or Class B Ordinary Shares outstanding during the period. The Company has not considered the effect of the warrants sold as
part of the Units in the Public Offering or the private placement to purchase an aggregate of 16,233,333 Class A Ordinary
Shares in the calculation of diluted loss per share, since the inclusion of such warrants are contingent upon the occurrence of a future event. The Sponsor Loan Warrants to purchase a total of up to 3,066,067 Class A Ordinary Shares to be granted upon conversion of the Sponsor Loan, if any, would also be contingent upon the occurrence
of future events and would therefore also be excluded from the calculation.
The Company’s unaudited
condensed statements of operations include a presentation of (loss) income per share for ordinary shares subject to possible redemption in a manner similar to the two-class method of (loss) income per share. Net (loss) income per
ordinary share, basic and diluted, for ordinary shares subject to possible redemption is calculated by dividing the proportionate share of income on earnings, by the weighted average number of ordinary shares subject to possible
redemption outstanding over the period. Net (loss) income is allocated evenly on a pro rata basis between Class A Ordinary Shares and the Company’s non-redeemable Ordinary Shares par value $0.0001
per share
based on weighted average number of ordinary shares outstanding over the period. Remeasurement adjustments are not considered in the calculation as remeasurement adjustments do not result in carrying value in the excess of fair value.
A reconciliation of net (loss) income per ordinary share is as follows:
|
For The Three
Months Ended
September 30,
2024
|
For The Three
Months Ended
September 30,
2023
|
For The Nine
Months Ended
September 30, 2024
|
For The Nine
Months Ended
September 30, 2023
|
|||||||||||||
|
Redeemable Class A Ordinary Shares
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||||||||||||||||
|
Numerator: Net income (loss) allocable to Redeemable Class A Ordinary Shares
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||||||||||||||||
|
Net income (loss) allocable to Redeemable Class A Ordinary Shares
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$ | $ | $ | ( |
) | $ | ||||||||||
|
|
||||||||||||||||
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Denominator: Weighted Average Share Outstanding, Redeemable Class A Ordinary Shares
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||||||||||||||||
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Basic and diluted weighted average shares outstanding, Redeemable Class A
|
||||||||||||||||
|
Basic and diluted net income (loss) per share, Class A ordinary shares subject to possible redemption
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
||||||||||||||||
|
Non-Redeemable Ordinary Shares
|
||||||||||||||||
|
Numerator: Net income (loss) allocable to non-redeemable Ordinary Shares
|
||||||||||||||||
|
Net income (loss) allocable to non-redeemable Ordinary Shares
|
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
||||||||||||||||
|
Denominator: Weighted Average Non-Redeemable Ordinary Shares
|
||||||||||||||||
|
Basic and diluted net income (loss) per share, non-redeemable ordinary shares
|
$ | $ | $ | ( |
) |
$
|
|
|||||||||
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company had no net deferred tax assets as of September 30, 2024.
ASC 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. There were no unrecognized tax benefits as of September 30, 2024. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
No amounts were accrued for the payment of interest and penalties as of September 30, 2024. 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 an exempted Cayman Islands company and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands. The Company has reviewed for potential tax filing requirements and liabilities created by maintaining its principal office in the state of Massachusetts, United States, and has determined it has no resulting tax
obligations. As such, the Company’s tax provision was zero for the periods presented.
Warrants
The Company accounts for the 16,233,333 warrants
issued in connection with the IPO (the 11,500,000 Public Warrants and the 4,733,333 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity” (“ASC 815-40”) and ASC 480, “Distinguishing Liabilities from Equity.”
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 whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own ordinary shares, among other conditions for equity classification. This assessment, which
requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent reporting period date while the warrants are outstanding.
Such guidance provides that because the warrants meet the criteria thereunder for equity classification, each warrant is recorded within Shareholders’ deficit.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.
Non-Redemption Agreements
In connection with the 1,500,000 Class B ordinary shares the Sponsor agreed to transfer to the Investors on or promptly after the consummation of the Business Combination pursuant to the
Non-Redemption Agreements, the Company estimated the aggregate fair value of the 1,500,000 Class B Ordinary Shares
attributable to the Investors to be $3,366,018 or a weighted average of $2.24 per share, which is estimated by taking into considerations the estimated probability of the consummation of a Business Combination, estimated concessions and
estimated cost of carrying charges to eliminate the investor’s exposure to changes in the price of their Class B Ordinary Shares. The excess of the fair value of the Class B Ordinary Shares was determined to be an offering cost in
accordance with Staff Accounting Bulletin Topic 5A. In substance, the Company recognized the offering cost as a capital contribution by the Sponsor to induce the Investors not to redeem their Class A ordinary shares, with a corresponding
charge to additional paid-in capital to recognize the fair value of the shares transferred as an offering cost.
As of December 31, 2023, in connection with the Original Extension and
the first and second Optional Extensions, the Sponsor agreed to transfer to the Investors an aggregate of 1,333,324 Class B
ordinary shares on or promptly after the consummation of the Business Combination pursuant to the Non-Redemption Agreements. The 1,333,324
Class B ordinary shares were recognized by the Company as a capital contribution by the Sponsor to induce the Investors not to redeem their Class A Ordinary Shares, with a corresponding charge to additional paid-in capital to recognize
the fair value of the shares transferred as an offering cost. The Company estimated the aggregate fair value of the 1,333,324
Class B ordinary shares attributable to the Investors to be $2,791,710 , or a weighted average of $2.09 per share. As of March 31, 2024, the Company estimated the aggregate fair value of the remainder of 166,676 Class B ordinary shares attributable to the Investors to be $574,308 , or a weighted average of $3.45 per share. The
total number of shares issuable under this arrangement had been satisfied in the period ended March 31, 2024. In the period ended March 31, 2024, 5,749,997 Class B ordinary shares were converted into Class A ordinary shares on a one
to one basis. The non-redeemable Class A ordinary shareholders retain all voting and conversion rights attributable to Class B ordinary shareholders since they have similar terms and conditions.
Sponsor Loan
When the Company issues convertible debt it first evaluates the balance sheet classification of the convertible instrument in its entirety to determine whether
the instrument should be classified as a liability under ASC 480 and second whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain
convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a stand-alone instrument, meets the definition of an “embedded derivative” as defined
in ASC 815. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by
issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the balance sheet
at fair value, with any changes in its fair value recognized currently in the statement of operations. The Sponsor Loan has a conversion feature that allows for converting the loan into warrants. The Company performed an evaluation as
outlined and determined that it qualifies for exemption as an equity instrument and is not bifurcated.
Recent Accounting Standards
In December 2023, the FASB issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). This update requires companies to disclose specific categories in the
income tax rate reconciliation and requires additional information for certain reconciling items. For public business entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The
Company will adopt the standards required under ASU 2023-09 as of January 1, 2025. The Company is currently evaluating the impact of ASU 2023-09 on its financial statements.
NOTE 3 -
PUBLIC OFFERING
Pursuant to the Public Offering, the
Company offered 23,000,000 Units at a price of $10.00 3,000,000 Units at the Public Offering price to cover over-allotments. Each Unit consisted of one Class A Ordinary Share and of one Public Warrant. Each whole
Public Warrant entitles the holder to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to adjustment (see Note 9, Warrants). The proceeds from the Public Offering and the related offering costs were allocated between the Class A
Ordinary Shares, Public Warrants and Private Placement Warrants using the relative fair value method. Costs associated with Class A Ordinary Shares were classified as a reduction of temporary equity, and costs allocated to the warrants were
classified as a reduction of permanent equity.
NOTE 4 - PRIVATE PLACEMENT
The Sponsor purchased an aggregate of 4,733,333 Private
Placement Warrants at a price of $1.50 per Private Placement Warrant, or approximately $7,100,000 in the aggregate in a private placement that occurred simultaneously with the closing of the Public Offering. Each Private Placement Warrant is exercisable for one Class A Ordinary Share at a price of $11.50
per share. $4,600,000 of the proceeds from the sale of the Private Placement Warrants to the Sponsor were added to the proceeds from the
Public Offering to be held in the Trust Account. The remaining cash was deposited into the Company’s operating account for future working capital purposes. If the Company does not complete a Business Combination within the Extended Combination
Period, the Private Placement Warrants will expire worthless.
The Sponsor, as purchaser of the Private Placement Warrants, agreed, subject to limited exceptions, not to transfer, assign or sell any of the Private Placement
Warrants (except to permitted transferees) until 30 days after the completion of the Business Combination.
NOTE 5 - RELATED PARTY TRANSACTIONS
Founder Shares
On May 13, 2021, the Sponsor, along with certain funds controlled by Data Point Capital, acquired 5,750,000
Class B Ordinary Shares (the “Founder Shares”) for an aggregate purchase price of $25,000 . Prior to the initial investment in the Company of $25,000 by our Sponsor along with certain funds controlled by Data Point Capital, the Company had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by
dividing the amount of cash contributed to the Company by the aggregate number of Founder Shares issued.
The Founder Shares will automatically convert into Class A Ordinary Shares on a one -for-one basis (a) at any
time and from time to time at the option of the holders thereof and (b) automatically on the day of the closing of the Business Combination. Notwithstanding the foregoing, in the case that additional Class A Ordinary Shares or any
other equity-linked securities (as defined in the Second A&R M&A), are issued, or deemed issued, by the Company in excess of the amounts offered in the IPO and related to the closing of a Business Combination, all Founder
Shares in issue shall automatically convert into Class A Ordinary Shares at the time of the closing of the Business Combination, at a ratio such that the number of Class A Ordinary Shares issuable upon conversion of all Founder Shares
will equal, in the aggregate on an as-converted basis, 20 % of the sum of (i) the total number of all Class A
Ordinary Shares and Founder Shares issued and outstanding, 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 (as defined in the Second A&R
M&A) or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the Business Combination, excluding (x) 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 Business Combination, and (y) the Private Placement Warrants issued to the Sponsor, any Sponsor Loan Warrants which may be issued to the Sponsor, and
any private placement warrants issued to our Sponsor, its affiliates or any member of our management team upon conversion of Working Capital Loans (as defined in Note 4). In no event will the Founder Shares convert into Class A Ordinary
Shares at a rate of less than one -to-one. The holders of a majority of the Founder Shares in issue may agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance. Prior to our Business Combination, only holders of the Founder Shares will be
entitled to vote on the appointment of directors. Pursuant to the terms of the Third A&R M&A, on February 9, 2024, the Initial Shareholders elected to convert an aggregate of 5,749,997 Class B Ordinary Shares on a one -for-one basis
into non-redeemable Class A Ordinary Shares (such shares, the “Converted Shares”).
Sponsor Loan
The Sponsor loaned the Company $4,600,000 as of the closing date of the Public Offering.
The Sponsor Loan bears no interest. The proceeds of the Sponsor Loan were deposited into the Trust Account and can be used to fund the redemption of the Public Shares (subject to the requirements of applicable law). The Sponsor Loan shall be
repaid or converted into Sponsor Loan Warrants at a conversion price of $1.50 per Sponsor Loan Warrant, at the discretion of the Sponsor, upon the consummation of a Business
Combination. The Sponsor Loan was extended in order to ensure that the amount in the Trust Account is $10.20 per public share. If the Company does not consummate a Business
Combination and the Sponsor Loan has not been converted into Sponsor Loan Warrants by such time, the Company will not repay the Sponsor Loan and its proceeds will be distributed to the Public Shareholders. The Sponsor has waived any claims
against the Trust Account in connection with the Sponsor Loan. As of September 30, 2024 and December 31, 2023 and through the date that the financial statements were issued, there was $4,600,000
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay any outstanding Working Capital Loans
out of the proceeds of the Trust Account released to the Company. Otherwise, any outstanding Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the
Company may use a portion of funds held outside the Trust Account to repay any outstanding Working Capital Loans but no funds held in the Trust Account would be used to repay any outstanding Working Capital Loans. Any outstanding Working
Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $1,500,000 of
such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.50 per warrant.
Such warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such Working Capital Loans.
As of September 30, 2024 and December 31, 2023, and through the date of filing of this form 10-Q, there were no
Capital Contribution
In the period ended September 30, 2024, related parties advanced an aggregate capital contribution of $935,116 to the Company to fund extension deposits into the Trust Account and other working capital needs. This capital contribution is not a loan and has no repayment
obligation.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Registration and Shareholder Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of the Sponsor Loan and the Working Capital Loans, (and any
Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the Sponsor Loan and the Working Capital Loans), are entitled to registration rights pursuant to the registration rights
agreement, dated as of November 8, 2021. These holders are entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement provides that the Company will not be required to effect or permit any
registration or cause any registration statement to become effective until termination of the applicable lock-up period which occurs (i) in the case of the Founder Shares, until the earliest of (A) one year after the completion of our Business Combination and (B) subsequent to our Business Combination, (x) if the closing price of our Class A ordinary shares equals or
exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like)
for a period of trading days, as defined after a Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to
exchange their ordinary shares for cash, securities or other property, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The
underwriter was entitled to an underwriting discount of $0.20 per Unit, or $4,600,000
in the aggregate paid at the closing of the
Public Offering. An additional fee of $0.35 per Unit, or $8,050,000
in the aggregate will be payable to the
underwriters for deferred underwriting commissions, which is included in the accompanying unaudited condensed balance sheets. The deferred fee will become payable to the underwriter 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.
Non-Redemption
Agreements
On May 5, 2023, the Company entered into a Non-Redemption Agreements with certain unaffiliated investors that eligible to redeem its shares of the Company’s Class A ordinary shares at the Company’s special meeting of stockholders held on May 10, 2023. Pursuant to the Non-Redemption Agreements, the Investors agreed to (i) not redeem an aggregate of up to
As of December 31, 2023, in connection with the First Extension and Non-Redemption Agreements, the Sponsor agreed to transfer
On January 8, 2024, pursuant to the Non-Redemption Agreements, the Sponsor agreed to transfer an additional
The fair value of these Shares was based on the publicly traded prices of the Company’s Class A ordinary shares on respective extension approval dates, management’s estimate of concessions and management’s estimate of the probability of completing an initial business combination.
NOTE 7 - 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 ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A Ordinary Shares subject to mandatory redemption are 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 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 feature certain redemption rights that are considered to be outside of the
Company’s control and subject to the occurrence of uncertain future events. Accordingly, such shares of the Company are classified as temporary equity.
As of September 30, 2024 and December 31, 2023, the Class A Ordinary Shares
reflected in the unaudited condensed balance sheets are reconciled as follows:
|
Number of
Shares
|
Amount |
|||||||
|
Class A Ordinary Shares subject to possible redemption at January 1, 2023
|
$
|
|
||||||
|
Remeasurement of redemption value of Class A Ordinary Shares subject to possible redemption
|
||||||||
|
Redemption of Class A ordinary shares
|
( |
) | ( |
) | ||||
| Class A Ordinary Shares subject to possible redemption at December 31, 2023 | $ | |||||||
|
Remeasurement of Class A ordinary shares to redemption value
|
||||||||
| Extension
deposits due from Sponsor |
- |
|||||||
|
Redemption of Class A ordinary shares subject to possible redemption
|
( |
) | ( |
) | ||||
|
Class A Ordinary Shares subject to possible redemption at March 31, 2024
|
$ | |||||||
| Extension deposits paid into Trust Account, net of extension deposits due from Sponsor as of March 31, 2024 |
- |
|||||||
| Remeasurement of Class A ordinary shares to redemption value |
||||||||
| Class A Ordinary Shares subject to possible redemption at June 30, 2024 |
$ | |||||||
|
Extension deposits paid into Trust Account
|
- |
|||||||
| Remeasurement of Class A ordinary shares to redemption value |
||||||||
| Class A
Ordinary Shares subject to possible redemption at September 30, 2024 |
$ | |||||||
NOTE 8 - SHAREHOLDERS’ DEFICIT
Preference Shares —
The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of
September 30, 2024 and December 31, 2023, there were no
Class A Ordinary Shares —
The Company is authorized to issue 200,000,000 0.0001 5,749,997 0 1,500,000 and 4,059,402
shares subject to possible redemption, respectively.
Pursuant to the terms of the Third A&R M&A, on February 9, 2024, the Initial Shareholders elected to convert an aggregate of 5,749,997 Class B Ordinary Shares on a one-for-one
basis into Class A Ordinary Shares (such shares, the “Converted Shares”). The initial shareholders will not have any redemption rights or be entitled to liquidating distributions from the Trust Account in connection with the Converted Shares if
the Company fails to consummate a Business Combination, and the Converted Shares will be subject to the restrictions on transfer pursuant to the letter agreement entered into by and between the initial shareholders and the Company in connection
with the IPO. Following such conversion, an aggregate of 7,249,997 1,500,000 three
Class B Ordinary Shares —
The Company is authorized to issue 20,000,000 Class B Ordinary Shares with a par value of $0.0001 per share. As of September 30, 2024 and December 31, 2023, 3 5,750,000 750,000 of Founder Shares were subject to forfeiture in the event that the underwriter did not purchase additional Units to cover over-allotments. The underwriters’
over-allotment option was exercised in full on November 12, 2021 and forfeiture restrictions lapsed. Prior to the initial investment in the Company of $25,000
by the Sponsor along with certain funds controlled by Data Point Capital, the Company had no assets, tangible or intangible. The per share purchase price of the Founder Shares was determined by dividing the amount of cash contributed to the
Company by the aggregate number of Founder Shares issued. Holders of the Class A Ordinary Shares and holders of the Class B Ordinary Shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders,
except as required by law or stock exchange rule; provided that only holders of the Class B Ordinary Shares shall have the right to vote on the election of the Company’s directors prior to the Business Combination. As of September 30, 2024, in
connection with the First Extension and Non-Redemption Agreements discussed in Note 2, the Sponsor agreed to transfer 1,500,000
Class B ordinary shares to the Investors on or promptly after the consummation of the Business Combination. The estimated aggregated fair value is $5,175,000
or a weighted average of $3.45 per share. The excess of the fair value of the Class B Ordinary Shares was determined to be an
offering cost in accordance with Staff Accounting Bulletin Topic 5A. In substance, the Company recognized the offering cost as a capital contribution by the Sponsor to induce the Investors not to redeem their Class A ordinary shares, with a
corresponding charge to additional paid-in capital to recognize the fair value of the shares transferred as an offering cost.
NOTE 9 - WARRANTS
Public
Warrants may only be exercised for a whole number of Class A Ordinary Shares. No fractional Public Warrants were or will be issued upon separation of the Units and only whole Public Warrants trade. The Public Warrants will become exercisable on
the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Public Offering; provided in each case that the Company has an effective registration statement under the Securities Act covering the
Class A Ordinary Shares issuable upon exercise of the Public Warrants and a current prospectus relating to the Public Warrants is available and such Class A Ordinary Shares issuable upon exercise of the Public Warrants are registered, qualified
or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or holders are permitted to exercise their Public Warrants on a cashless basis under certain circumstances as a result of the Company’s
failure to have an effective registration statement by the 60 th business day after the closing of the Business Combination). The
Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of its Business
Combination, the Company will use its commercially reasonable efforts to file with the SEC and have an effective registration statement covering the Class A Ordinary Shares issuable upon exercise of the warrants and will use its commercially
reasonable efforts to cause the same to become effective within 60 business days after the closing of the Company’s Business
Combination and to maintain a current prospectus relating to those Class A Ordinary Shares until the Public Warrants expire or are redeemed. If the shares issuable upon exercise of the Public Warrants are not registered under the Securities Act
in accordance with the above requirements, the Company will be required to permit holders to exercise their Public Warrants on a cashless basis. However, no Public Warrant will be exercisable for cash or on a cashless basis, and the Company
will not be obligated to issue any Class A Ordinary Shares to holders seeking to exercise their Public Warrants, unless the issuance of the Class A Ordinary Shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration
is available.
The
Public Warrants have an exercise price of $11.50 per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation of the Company. 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 Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A Ordinary Shares (with such issue price or effective issue price to be determined in good faith by the 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 Business Combination on the date of the consummation of the Business Combination (net of redemptions) and (z) the volume weighted average trading price of Class A Ordinary Shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the 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, and the $18.00
per share redemption trigger price described in the Public Warrant Agreement, dated November 8, 2021 by and between the Company and Continental Stock Transfer & Trust Company, under “Redemption of warrants for Class A Ordinary Shares” and
“Redemption of warrants for cash” will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the
Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, except that, (i) they will not be redeemable by the Company, (ii) they (including the Class A
Ordinary Shares issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of the Business Combination, and (iii) are subject to registration rights.
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 as described herein with respect to the Private Placement Warrants):
| ● |
In whole and not in part;
|
| ● |
At a price of $
|
| ● |
Upon a minimum of
|
| ● |
If, and only if the last reported sale price of Class A Ordinary Shares for any
|
The
Company will not redeem the Public Warrants as described above unless an effective registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the Public Warrants is effective and a current
prospectus relating to those Class A Ordinary Shares is available throughout the 30 -day redemption period. Any such exercise would not
be on a cashless basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised.
In no event will the Company be required to net cash settle any Public Warrant. If the Company is unable to complete a Business Combination within the Extended Combination Period or during any further extended time that the Company has to consummate a business combination beyond the Extended Combination Period, as a result of a shareholder vote to amend the Fourth A&R M&A and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless. Private Placement Warrants have the same terms as the Public Warrants.
NOTE 10 — FAIR VALUE MEASUREMENTS
On November 8, 2023, in order to mitigate the potential risks of being deemed to have been operating as an unregistered investment
company for purposes of the Investment Company Act, the Company instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations and money
market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest-bearing demand deposit account until the earlier of the consummation of the Company’s Business Combination or liquidation. As such,
the amount held in Trust Account as of September 30, 2024 and December 31, 2023 is not subject to fair value measurement.
Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three and nine months ended September 30, 2024 and 2023.
NOTE 11 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that
occurred after the unaudited condensed balance sheet date through the date that the financial statements were issued. Based on this review, the Company did not identify any subsequent events that would have required adjustment or
disclosure in the financial statements other than the following.
On October 16, 2024, the Company made a deposit of $49,500 into the Trust Account representing extension payment for October 2024.
On November 11, 2024, the Company held a third extraordinary general meeting of shareholders (the “Third Extraordinary General Meeting”)
at which our shareholders approved, by special resolution, a proposal to amend and restate the Third A&R M&A to extend the Extension Date from November 12, 2024 to November 12, 2025 (the “Third Extension”). In connection with
the Third Extraordinary General Meeting, holders of an additional 1,451,905 Class A Ordinary Shares properly exercised
their right to redeem their Class A Ordinary Shares for cash at a redemption price of approximately $11.63 per share. As a
result, on November 13, 2024, an aggregate of approximately $16.9 million was removed from the Trust Account to pay such
holders. Following this redemption, the Company has 48,095 Class A Ordinary Shares with redemption rights outstanding. As
of November 13, 2024, $0.56 million remained in the Trust Account.
On
November 12, 2024, the Company received a delisting notice from Nasdaq that, as the Company was not able to complete a business combination within 36 months of the effectiveness of our IPO registration statement, or November 8,
2024, as required under Nasdaq Listing Rule IM-5101-2(b) (the “Rule”), unless the Company timely requests a hearing before a Nasdaq hearings panel, the Company’s securities will be suspended from trading at the opening of business
on November 19, 2024 and will be delisted from the Nasdaq Stock Market. While the Company may appeal the suspension and delisting, a Nasdaq hearings panel will have no discretion in allowing us to remain listed and may only reverse
the Nasdaq’s staff’s determination if it finds it made a factual error applying the Rule. The Company has decided not to appeal the suspension and delisting.
References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to DP Cap Acquisition Corp I. References to our
“management” or our “management team” refer to our officers and directors and references to the “Sponsor” refer to DP Investment Management Sponsor I LLC. The following discussion and analysis of the Company’s 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 Quarterly Report (the “Financial Statements”). Capitalized terms used but not otherwise defined herein have
the meaning set forth in the Financial Statements. 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 of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange
Act of 1934, as amended (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 Quarterly Report 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 sections of the Company’s Annual Report on Form 10-K/A filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 10, 2024 and this Quarterly Report. 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 on April 8, 2021 as a Cayman Islands exempted company and formed 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 (the “Business Combination”) that we have not yet identified. We are an emerging growth company and, as such, we are subject to all of the risks associated with
emerging growth companies. We completed our Public Offering on November 12, 2021. As of September 30, 2024, we had not identified any Business Combination target.
We presently have no revenue and have had no operations other than the active solicitation of a target business with which to complete a Business Combination.
We expect to continue to incur significant costs in the pursuit of our Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
Our registration statement for our Public Offering was declared effective on November 8, 2021. On November 12, 2021, we consummated our Public Offering of 23,000,000 units (the “Units”), which included
the exercise in full of the underwriter’s option to purchase an additional 3,000,000 Units at the Public Offering price to cover over-allotments. Each Unit consists of one Class A ordinary share, par value $0.0001 per share (the “Class A ordinary
shares”), and one-half of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment. The Units were
sold at a price of $10.00 per Unit, generating gross proceeds of $230.0 million.
Simultaneously with the closing of the Public Offering, we consummated the private sale (the “Private Placement”) of 4,733,333 warrants (the “Private Placement Warrants”) to DP Investment Management
Sponsor I LLC (the “Sponsor”), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per Private Placement Warrant, generating total gross proceeds of $7.1 million.
Simultaneously with the closing of the Public Offering, pursuant to the Sponsor’s promissory note (the “Sponsor Note”), the Sponsor loaned $4,600,000 to the Company (the “Sponsor Loan”). The Sponsor
Loan is interest free. The Sponsor Loan shall be repaid or converted into warrants (the “Sponsor Loan Warrants”) at a purchase price of $1.50 per Sponsor Loan Warrant, at the Sponsor’s discretion and at any time until the consummation of our initial
Business Combination. Any Sponsor Loan Warrants issued will be identical to the Private Placement Warrants.
Upon the closing of our Public Offering, a total of $234.6 million ($10.20 per unit), comprised of $225.4 million of the proceeds from the Public Offering (which amount includes $8.05 million of the
underwriter’s deferred discount), $4.6 million of the proceeds of the sale of the Private Placement Warrants and $4.6 million of the proceeds from the Sponsor Loan, were placed in a U.S.- based trust account (“Trust Account”) maintained by
Continental Stock Transfer & Trust Company acting as trustee. The funds held in the Trust Account may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended
(the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined
by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
Our management has broad discretion with respect to the specific application of the net proceeds of our Public Offering and the sale of the Private Placement Warrants, although substantially all of the
net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully.
We must complete one or more Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working
capital purposes, if permitted, and excluding the amount of deferred underwriting discounts held in trust) at the time of our signing a definitive agreement in connection with our Business Combination. However, we only intend to complete a Business
Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment
company under the Investment Company Act.
If we are unable to complete a Business Combination by November 12, 2025, and our shareholders have not amended our fourth amended and restated memorandum and articles of association (the “Fourth
A&R M&A”) to extend the combination period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds
therefor, redeem the Public Shares, at a 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 us to pay
our taxes (if any) (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right
to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and our board of directors, liquidate and
dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
On May 5, 2023, certain of our unaffiliated investors (the “Investors”) entered into non-redemption agreements (“Non-Redemption Agreements”) with the Sponsor,
pursuant to which the Investors agreed to (i) not redeem an aggregate of up to 4,000,000 previously-held Class A ordinary shares (the “Investor Shares”) in connection with the First Extension (as defined below) and (ii) vote the Investor Shares in
favor of the First Extension. In exchange for these commitments from the Investors, the Sponsor has agreed to transfer to the Investors (i) an aggregate of up to 1,000,000 Class B ordinary shares in connection with an extension until November 12,
2023 and (ii) to the extent our board of directors agrees to further extend the date up to three times by an additional month each time until February 12, 2024 to consummate its Business Combination, an aggregate of up to 1,500,000 Class B ordinary
shares, which includes the Class B ordinary shares referred to in clause (i), in each case, on or promptly after the consummation of the Business Combination.
On May 10, 2023, we held an extraordinary general meeting of shareholders (the “First Extraordinary General Meeting”) at which our shareholders voted to approve to amend and restate our amended and
restated memorandum and articles of association to extend the date (the “Extension Date”) by which we must (1) consummate our Business Combination, (2) cease our operations except for the purpose of winding up if we fail to complete such Business
Combination, and (3) redeem all of the Class A ordinary shares included as part of the Units sold in the Public Offering, from May 12, 2023 to November 12, 2023, with optional additional extensions of up to three times by an additional month each
time, at the option of our board of directors, until February 12, 2024 (the “First Extension”).
In connection with the First Extension, shareholders holding 18,940,598 Class A ordinary shares issued in our Public Offering exercised their right to redeem such shares at a per share redemption price
of $10.51. As a result, approximately $199.0 million was removed from our Trust Account to pay such holders. Following these redemptions, we had 4,059,402 Class A ordinary shares with redemption rights outstanding.
On November 8, 2023, our board of directors approved the extension of the date by which we are required to complete our Business Combination until December 12, 2023. On December 8, 2023, our board of
directors approved the extension of the date by which we are required to complete our Business Combination until January 12, 2024. On January 8, 2024, our board of directors approved the extension of the date by which we are required to complete our
Business Combination until February 12, 2024.
On February 8, 2024, we held a second extraordinary general meeting of shareholders (“Second Extraordinary General Meeting”) at which our shareholders approved, by special resolution, a proposal to
amend and restate the Company’s second amended and restated memorandum and articles of association to extend the Extension Date from February 12, 2024 to November 12, 2024 (the “Second Extension”). In connection with the Second Extension, the holders
of an additional 2,559,402 Class A ordinary shares properly exercised their right to redeem their Class A ordinary shares for cash at a redemption price of approximately $10.96 per share. As a result, an aggregate of approximately $28 million was
removed from our Trust Account to pay such holders. Following these redemptions, we had 1,500,000 Class A ordinary shares with redemption rights outstanding and approximately $16.4 million in our Trust Account.
In connection with the approval of the Second Extension, the Sponsor has agreed to deposit on a monthly basis, or pro rata portion thereof if less than a month, $49,500 into our Trust Account for the
benefit of our public shareholders (the “Extension Deposit”), until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve a Business Combination and (ii) November 12, 2024 (or any
earlier date of termination, dissolution or winding up of the Company as determined in the sole discretion of our board of directors). As of September 30, 2024, the Sponsor deposited an aggregate of $396,000 into its Trust Account as Extension
Deposits from February 13, 2024 through September 30, 2024. On October 16, 2024 the Company made a deposit of $49,500 into the Trust Account representing extension deposit for October 2024.
Pursuant to the terms of the third amended and restated memorandum and articles of association, on February 9, 2024, the Initial Shareholders elected to convert
an aggregate of 5,749,997 Founder Shares on a one-for-one basis into Class A ordinary shares (such shares, the “Converted Shares”). The Initial Shareholders will not have any redemption rights or be entitled to liquidating distributions from the
Trust Account in connection with the Converted Shares if we fail to consummate a Business Combination, and the Converted Shares will be subject to the restrictions on transfer included in the letter agreement entered into by and between the Initial
Shareholders and us in connection with our Public Offering. Following such conversion, and as a result of the redemptions described above, as of March 15, 2024, we had an aggregate of 7,249,997 Class A ordinary shares issued and outstanding, of which
1,500,000 Class A ordinary shares issued and outstanding are with redemption rights, and three Founder Shares issued and outstanding.
Application for Transfer to The Nasdaq Capital Market
On August 21, 2023, we received a letter from the Listing Qualifications staff (the “Nasdaq Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we were not in compliance with Nasdaq
Listing Rule 5450(b)(2)(A), which requires that our listed securities maintain a minimum Market Value of Listed Securities (“MVLS”) of $50 million (the “MVLS Rule”). Subsequently on March 11, 2024, the Nasdaq Staff notified us that we have regained
compliance with the MVLS Rule. On October 12, 2023, we received a second letter from the Nasdaq Staff notifying us that we were not in compliance with Nasdaq Listing Rule 5450(a)(2), which requires that we maintain a minimum of 400 total holders for
continued listing on the Nasdaq Global Market (the “Minimum Total Holders Rule”). To resolve the deficiencies and regain compliance with the Nasdaq continued listing requirements, the Company submitted an application to Nasdaq for a transfer from The
Nasdaq Global Market to The Nasdaq Capital Market on January 24, 2024, which was approved by the Nasdaq on March 26, 2024. On April 4, 2024, the Company’s Units, Class A Ordinary Shares and Public Warrants transferred from The Nasdaq Global Market to
The Nasdaq Capital Market, which was approved by the Nasdaq on March 26, 2024.
Recent Development
On November 11, 2024, we held a third extraordinary general meeting of shareholders (the “Third Extraordinary General Meeting”) at which our
shareholders approved, by special resolution, a proposal to amend and restate the Third A&R M&A to extend the Extension Date from November 12, 2024 to November 12, 2025 (the “Third Extension”). In connection with the Third Extraordinary
General Meeting, holders of an additional 1,451,905 Class A Ordinary Shares properly exercised their right to redeem their Class A Ordinary Shares for cash at a redemption price of approximately $11.63 per share. As a result, on November 13, 2024,
an aggregate of approximately $16.9 million was removed from the Trust Account to pay such holders. Following this redemption, we have 48,095 Class A Ordinary Shares with redemption rights outstanding. As of November 13, 2024, $0.56 million
remained in the Trust Account.
On November 12, 2024, we received a delisting notice from Nasdaq that, as we were not able to complete a business
combination within 36 months of the effectiveness of our IPO registration statement, or November 8, 2024, as required under Nasdaq Listing Rule IM-5101-2(b) (the “Rule”), unless we timely request a hearing before a Nasdaq hearings panel, our
securities will be suspended from trading at the opening of business on November 19, 2024 and will be delisted from the Nasdaq Capital Market. While we may appeal the suspension and delisting, a Nasdaq hearings panel will have no discretion in
allowing us to remain listed and may only reverse the Nasdaq’s staff’s determination if it finds it made a factual error applying the Rule. We have decided not to appeal the suspension and delisting.
Results of Operations
For the three and nine months ended September 30, 2024, we had a net income (loss) of $34,794 and $(239,189), respectively, which consisted of earnings on cash (investments) held in trust of $183,818
and $691,273, respectively, offset by general and administrative costs of $149,024 and $930,462, respectively.
For the three and nine months ended September 30, 2023, we had net income of $275,282 and $3,517,704, respectively, which consisted of earnings on investments held in Trust Account of $562,845 and
$4,778,599, respectively, partially offset by general and administrative expenses of $287,563 and $1,260,895 (including formation expenses), respectively.
All activity from April 8, 2021 (inception) through September 30, 2024, relates to our formation and our Public Offering and subsequent to our Public Offering, the search for a target for our Business
Combination. We will not generate any operating revenues until after the completion of our Business Combination, at the earliest.
Liquidity and Capital Resources
The registration statement for our Public Offering was declared effective by the SEC on November 8, 2021. On November 12, 2021, we consummated our Public Offering of 23,000,000 Units, inclusive of the
underwriters’ election to exercise their option to purchase an additional 3,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Public Offering, we consummated the sale of
4,733,333 Private Placement Warrants to our Sponsor at a price of $1.50 per warrant, generating gross proceeds of $7,100,000. On the Close Date, our Sponsor loaned us $4,600,000 under the Sponsor Loan.
Following the Public Offering, the sale of the Private Placement Warrants and the issuance of the proceeds under the Sponsor Loan, a total of $234,600,000 was placed in the Trust Account, which
consisted of $225,400,000 from the proceeds from the Public Offering, $4,600,000 from the proceeds of the sale of the Private Placement Warrants and $4,600,000 from the proceeds from the Sponsor Loan. We incurred $13,148,152 in transaction costs,
including $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $498,152 of other costs.
Our liquidity needs up to September 30, 2024 had been satisfied through (i) a payment from the Sponsor along with certain funds controlled by Data Point Capital
of $25,000 to cover certain offering and formation costs in exchange for the issuance of the Founder Shares to the Sponsor and (ii) the receipt of loans to us of up to $300,000 by the Sponsor under an unsecured promissory note. The unsecured
promissory note was non-interest bearing and was due at the earlier of December 31, 2021 and the closing of the Public Offering. As of September 30, 2024, no amounts were outstanding under the unsecured promissory note. In addition, in order to
finance transaction costs in connection with a Business Combination, the 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. In the period ended September
30, 2024, related parties have advanced an aggregate of $935,116 in capital contributions to the Company for the purpose of funding extension deposits and other working capital needs; however, the Company may still need additional capital to fund its
working capital needs and search for a target. As of September 30, 2024, and through the date of this filling, there were no amounts outstanding under any working capital loans.
For the nine months ended September 30, 2024, net cash used in operating activities was $690,012, consisting of net loss of $(239,189), earnings on cash held in Trust Account of $691,273 and changes in
operating assets and liabilities of $240,450, resulting primarily from increases in accounts payable and accrued expenses.
For the nine months ended September 30, 2023, net cash used in operating activities was $366,062, consisting of net income of $3,517,704, earnings on investments held in Trust Account of $4,778,599 and changes in operating
assets and liabilities of $894,833, resulting primarily from increases in accounts payable and accrued expenses.
As of September 30, 2024, we had cash held in the Trust Account of $17,318,372. As of December 31, 2023, we have investments held in Trust Account of $44,290,118. At the Second Extraordinary General
Meeting held on February 8, 2024, in connection with the Second Extension, holders of an additional 2,559,402 Class A ordinary shares properly exercised their right to redeem their Class A ordinary shares for cash at a redemption price of
approximately $10.96 per share. As a result, an aggregate of approximately $28 million was removed from our Trust Account to pay such holders. We may withdraw interest earned to pay our income 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 (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our Business Combination. To the
extent that our share capital is used, in whole or in part, as consideration to complete a 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.
As of September 30, 2024 and December 31, 2023, we had cash of $258,747 and $409,643, respectively, 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, structure, negotiate and complete a Business Combination, and to pay our other operating expenses. In the period ended September 30, 2024, related parties have advanced an
aggregate of $935,116 in capital contributions to the Company. The Company utilized $396,000 of this contribution to fund extension deposits paid into the Trust Account and the remainder is available to the Company for working capital needs.
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. If we complete a Business Combination, we would repay such loaned amounts or, in the case of Working Capital Loans, such loans may be converted into warrants of the Company at the
option of the lender. In the event that a Business Combination does not close, we may use a portion of the cash held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.
We believe we will need to raise additional funds in order to meet the expenditures required for operating our business. Additionally, 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 then outstanding public shares upon completion of our Business Combination, in which case we may issue
additional securities or incur debt in connection with such Business Combination.
At September 30, 2024 and December 31, 2023, other than the $4,600,000 Sponsor Loan, we did not have other long-term debt, capital lease obligations, operating
lease obligations or long-term liabilities.
Going Concern Considerations
We have until November 12, 2025 to consummate a Business Combination. It is currently uncertain that we will be able to consummate a Business Combination by this time. If our Business Combination cannot
be completed prior to November 12, 2025, we will cease operations except for the purpose of winding-up, redeem our outstanding public shares, and liquidate and dissolve unless, prior to such date, the Company receives an extension approval from its
shareholders and elects to further extend the date on which a Business Combination must be consummated.
As of September 30, 2024, we had $258,747 in cash outside of the Trust Account for our working capital needs and a working capital deficit of $1,084,165. We expect to incur significant costs in pursuit
of our acquisition plans and the net proceeds of the Public Offering, the sale of the Private Placement Warrants and the Sponsor Loan not being held in the Trust Account are insufficient to allow us to operate until November 12, 2025. The Company
will likely depend on loans and or capital contributions from our Sponsor, its affiliates or members of the management team and/or third parties to fund our search and to complete a Business Combination. Further, if our estimates of the costs of
undertaking in-depth due diligence and negotiating the Business Combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to a Business Combination. The Sponsor is not under
any obligation to advance additional funds to, or to invest in, us. If we are unable to raise additional funds, we 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 our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.
We continue our search for a target and will continue pursuing all options to complete a Business Combination by November 12, 2025. It is uncertain whether we will be able to consummate a Business
Combination by November 12, 2025 or whether the current funds that we have will be sufficient to consummate a Business Combination. If a Business Combination is not consummated by November 12, 2025, we will cease operations except for the purpose of
winding up, redeem the then outstanding Public Shares, and liquidate and dissolve unless, prior to such date, we receive an extension approval from our shareholders and elect to extend the date on which a Business Combination must be consummated.
These factors, among others, raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this Quarterly Report. These unaudited condensed financial statements do not include any adjustment that
might be necessary if we are unable to continue as a going concern.
Commitments and Contingencies
Registration Rights
The holders of 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 the working capital loans) are entitled to registration rights 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 our Business Combination.
However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup period, which occurs (i) in the case of the Founder
Shares, until the earliest of (A) one year after the completion of our Business Combination and (B) subsequent to our Business Combination, (x) if the closing price of our Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for
share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after our Business Combination, or (y) the date on which we complete a
liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for cash, securities or other property, and (ii) in the case of the Private Placement
Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriter a 45-day option from the date of the Public Offering to purchase on a pro rata basis up to 3,000,000 additional Units to cover
over-allotments, if any, at the Public Offering price, less the underwriting discounts and commissions. The over-allotment option was exercised in full on November 12, 2021.
The underwriter was entitled to an underwriting discount of $0.20 per Unit, or $4.6 million in the aggregate, paid upon the closing of the Public Offering. An additional fee of $0.35 per Unit, or $8.05
million in the aggregate will be payable to the underwriter for deferred underwriting commissions. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business
Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our Financial Statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of our Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets
and liabilities in our Financial Statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on known trends and events and
various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or conditions. Refer to our Annual Report on Form 10-K/A for the year ended December 31, 2023 filed on April 10, 2024 for our critical accounting policies and estimates. There have
been no changes in these policies since the filing of this Form 10-K/A.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are
allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply
with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the Financial Statements may not be comparable to companies that comply with new or revised
accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act,
if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404
of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be
adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis)
and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will
apply for a period of five years from the completion of our Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
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ITEM 3.
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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.
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ITEM 4.
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CONTROLS AND PROCEDURES. |
Evaluation of Disclosure Controls and Procedures
Evaluation of Disclosure 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 the 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 company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial and accounting
officer to allow timely decisions regarding required disclosure.
As required by Rule 13a-15 and 15d-15 under the Exchange Act, our principal executive officer and principal financial and accounting officer carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures as of the end of the fiscal quarter ended September 30, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Due to identified material weaknesses in our
internal control over financial reporting identified in current and previous reporting periods, as described below, our principal executive officer and principal financial and accounting officer concluded that our disclosure controls and procedures
were not effective as of September 30, 2024.
Notwithstanding the conclusion by our principal executive officer and principal financial officer that our disclosure controls and procedures as of September 30, 2024 were not effective, and
notwithstanding the material weaknesses in our internal control over financial reporting described below, management believes that the unaudited condensed financial statements and related financial information included in this Quarterly Report fairly
present in all material respects our financial condition, results of operations and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with GAAP.
Material Weakness
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the
Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our Annual Report for the year ended December 31, 2023 as filed with the SEC on April 10, 2024, management identified a
deficiency in internal control over financial reporting related to the accounting for complex financial instruments and the review and approval of adjusting journal entries. As of September 30, 2024, the identified material weaknesses in our internal
controls over financial reporting have not yet been remediated.
Remediation Plan
Management plans to remediate the material weaknesses by 1) incorporating additional controls and procedures over the review of complex financial instrument
valuations, 2) increasing communication among our personnel and third-party professionals with whom we consult regarding accounting applications and 3) incorporating additional procedures over the review of the general ledger and the review and
approval of adjustment to journal entries. 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.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2024 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
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ITEM 1.
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LEGAL PROCEEDINGS.
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None.
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ITEM 1A.
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RISK FACTORS |
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the “Risk Factors” sections of our Annual Report on Form 10-K/A
filed with the SEC on April 10, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. We may disclose changes to such factors or disclose additional factors from time
to time in our future filings with the SEC.
As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2023, other than as set
forth below:
Risks related to Potential Delisting of Securities from Nasdaq
The Company’s securities are listed on the Nasdaq Stock Market. Pursuant to Nasdaq rules, the Company is currently required to consummate its initial
business combination within 36 months from its original listing date. The Company’s securities were listed on Nasdaq in November 2021. As the Third Extension was approved and effectuated, the Company has until November 12, 2025 pursuant to its
charter to consummate an initial business combination. As a result, the Company could continue to seek to consummate its initial business combination beyond 36 months from the original listing date. Nasdaq Rule 5815 was recently amended to provide
for the immediate suspension and delisting of a listed company upon issuance of a delisting determination letter for failure to meet the requirement in Nasdaq Rule IM 5101-2(b), which requires a company to complete one or more business combinations
within 36 months of the date of effectiveness of its IPO registration statement. Accordingly, the Company’s securities will face immediate suspension and delisting action once the Company receives a delisting determination letter from Nasdaq after
the 36-month window ends on November 8, 2024. Pursuant to Rule 5815, as amended, Nasdaq may only reverse the determination if it finds it made a factual error applying such rule. On November 12, 2024, the Company received a delisting notice from
Nasdaq that, as it was not able to complete a business combination within 36 months of the effectiveness of its IPO registration statement, or November 8, 2024, as required under Nasdaq Listing Rule IM-5101-2(b), unless the Company timely requests
a hearing before a Nasdaq hearings panel, its securities will be suspended from trading at the opening of business on November 19, 2024 and will be delisted from the Nasdaq Stock Market. The Company has decided not to appeal the suspension and
delisting.
Once Nasdaq delists any of the Company’s securities from trading on its exchange and the Company is not able to list such securities on another
approved national securities exchange, the Company expects that such securities could be quoted on an over-the-counter market. If this were to occur, the Company could face significant material adverse consequences, including: (i) a limited
availability of market quotations for the Company’s securities, (ii) reduced demand and liquidity for the Company’s securities, (iii) a determination that the Public Shares are “penny stocks” and no longer “covered securities,” which will require
brokers trading in the Public Shares to adhere to more stringent rules, including being subject to the depository requirements of Rule 419 of the Securities Act, and possibly result in a reduced level of trading activity in the secondary trading
market for the Company’s securities making it more difficult for investors to trade the Company’s securities, (iv) a decreased ability to issue additional securities or obtain additional financing in the future, and (v) making the Company a less
attractive acquisition vehicle to a target business in connection with an initial business combination. Any of the foregoing could have a material adverse effect on the Company’s ability to consummate an initial business combination and make it
significantly harder to consummate such an initial business combination.
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ITEM 2.
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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
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Unregistered Sales
None.
Use of Proceeds
On November 8, 2021, our registration statement on Form S-1 (File No. 333-260456) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 23,000,000 Units,
inclusive of the underwriters’ election to exercise their option to purchase an additional 3,000,000 Units, at an offering price to the public of $10.00 per Unit for an aggregate offering price of $230,000,000, with each Unit consisting of one Class
A ordinary share of the Company at $0.0001 par value and one-half of one warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share.
Net proceeds of $230,000,000 from the Public Offering and the sale of the Private Placement Warrants, including deferred underwriting discounts of $8,050,000, were deposited into the Trust Account on
the Close Date and $4,600,000 of the proceeds from the sale of the Private Placement Warrants was deposited in our operating account for future working capital expenditures. We paid $4,600,000 in underwriting discounts and incurred offering costs of
$498,152 related to the Public Offering. In addition, the Underwriters agreed to defer $8,050,000 in underwriting discounts, which amount will be payable when and if a business combination is consummated. No payments were made by us to directors,
officers or persons owning ten percent or more of our Class A ordinary shares or to their associates, or to our affiliates.
In connection with the First Extension adopted at the First Extraordinary General Meeting held on May 10, 2023, we paid approximately $199.0 million in redemption proceeds to shareholders holding
18,940,598 Class A ordinary shares who exercised their right to redeem such shares at a per share redemption price of $10.51.
In connection with the Second Extension adopted at the Second Extraordinary General Meeting held on February 8, 2024, we paid approximately $28 million in redemption proceeds to shareholders holding
2,559,402 Class A ordinary shares who exercised their right to redeem such shares at a per share redemption price of $10.96.
In connection with the Third Extension adopted at the Third Extraordinary General Meeting held on November 11, 2024, we paid approximately $16.9 million in
redemption proceeds to shareholders holding 1,451,905 Class A ordinary shares who exercised their right to redeem such shares at a per share redemption price of $11.63.
Other than as described above, there has been no material change in the planned use of proceeds from the Public Offering as described in our final Prospectus, dated November 8, 2021, which was filed
with the SEC on November 10, 2021.
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ITEM 3.
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DEFAULTS UPON SENIOR SECURITIES.
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None.
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ITEM 4.
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MINE SAFETY DISCLOSURES.
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Not applicable.
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ITEM 5.
|
OTHER INFORMATION.
|
| a) |
|
| b) |
None.
|
| c) |
None.
|
|
ITEM 6.
|
EXHIBITS.
|
|
No.
|
Description of Exhibit
|
|
|
Fourth Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K filed with the SEC on November 13, 2024 (File No.
001-41041))
|
||
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
Certification of Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
|
101.INS*
|
Inline XBRL Instance Document
|
|
|
101.CAL*
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.SCH*
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
101.DEF*
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB*
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
101.PRE*
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
104*
|
Cover Page Interactive Data File
|
* Filed herewith.
** Furnished herewith.
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.
|
DP CAP ACQUISITION CORP I
|
||
|
Date: November 14, 2024
|
By:
|
/s/ Scott Savitz
|
|
Name:
|
Scott Savitz
|
|
|
Title:
|
Chief Executive Officer and Chairman
|
|
|
By:
|
/s/ Bruce Revzin
|
|
|
Date: November 14, 2024
|
Name:
|
Bruce Revzin
|
|
Title:
|
Chief Financial Officer
|
|
|
(Principal Accounting and Financial Officer)
|
32