UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-41182

Sagaliam Acquisition Corp.

(Exact name of registrant as specified in its charter)

Delaware		86-3006717
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1800 Avenue of the Stars, Suite 1475

Los Angeles, CA (90067)

(Address of Principal Executive Offices, including zip code)

(213) 616-0011

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of Class A common stock, and right	SAGAU	The Nasdaq Stock Market LLC
Class A common stock included as part of the units	SAGA	The Nasdaq Stock Market LLC
Rights included as part of the units	SAGAR	The Nasdaq Stock Market LLC

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.

☐ Large accelerated filer	☐ Accelerated filer
☒ Non-accelerated filer	☒ Smaller reporting company
	☒ Emerging growth company

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 August 15, 2022, there were 12,015,000 shares of Class A common stock (including 11,500,000 shares of Class A common stock subject to redemption and 2,875,000 shares of Class B common stock, $0.0001 par value, issued and outstanding).

SAGALIAM ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS

		Page

PART I — FINANCIAL INFORMATION

Item 1.	Interim Financial Statements	1

	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (audited)	1

	Condensed Statements of Operations for the Three and Six Months Ended June 30, 2022 and for the period March 31, 2021 (Inception) through June 30, 2021 (unaudited)	2

	Condensed Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2022 (unaudited) and for the period March 31, 2021 (inception) through June 30, 2021 (unaudited)	3

	Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and for the period March 31, 2021 (inception) through June 30, 2021 (unaudited)	4

	Notes to Condensed Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	20

Item 4.	Mine Safety Disclosures	20

Item 5.	Other Information	20

Item 6.	Exhibits	21

SIGNATURES		22


	June 30, 2022			December 31, 2021
	(unaudited)			(audited)
ASSETS
Current Assets
Cash	$	243,090		$	762,040
Prepaid expenses		231,127			201,377
Total Current Assets		474,217			963,417
Prepaid expenses – non-current		—			100,690
Marketable securities held in Trust Account		116,277,311			116,157,019
TOTAL ASSETS	$	116,751,528		$	117,221,126

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable, accrued expenses	$	455,064		$	225,995
Total Current Liabilities		455,064			225,995
Deferred underwriting fee payable		4,025,000			4,025,000
Total Liabilities		4,480,064			4,250,995
Commitments and Contingencies		-
Class A common stock, 11,500,000 shares, subject to possible redemption at $10.10 per share		116,150,000			116,150,000
Stockholders’ Deficit
Preferred stock, $0.0001 par value; 1,000,000 shares authorized: none issued and outstanding		—			—
Class A common stock, $0.0001 par value, 100,000,000 shares authorized; 515,000 issued and outstanding		52			52
Class B common stock, $0.0001 par value, 10,000,000 shares authorized, 2,875,000 shares issued and outstanding		288			288
Common stock value
Accumulated deficit		(3,878,876	)		(3,180,209	)
Total Stockholders’ Deficit		(3,878,536	)		(3,179,869	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	116,751,528		$	117,221,126


	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022			For the period from March 31, 2021 (inception) through June 30, 2021
Formation and operating costs	$	(312,849	)	$	(818,959	)	$	(41,356	)
Loss from operations		(312,849	)		(818,959	)		(41,356	)
Other income:
Interest earned on marketable securities held in Trust Account, net		152,842			120,292			—
Net loss	$	(160,007	)	$	(698,667	)	$	(41,356	)

Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption		11,500,000			11,500,000			—
Basic and diluted net loss per Class A common stock subject to possible redemption	$	(0.01	)	$	(0.05	)	$	—
Basic and diluted weighted average shares outstanding of non-redeemable common stock	$	3,390,000		$	3,390,000		$	2,500,000
Basic and diluted net loss per non-redeemable common stock	$	(0.01)		$	(0.05)		$	(0.02)



	Class A Common Stock Issued				Class B Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance — January 1, 2022		515,000	$	52		2,875,000	$	288	$	—	$	(3,180,209	)	$	(3,179,869	)
Net loss		-		-		—		—		—		(538,660	)		(538,660	)
Balance – March 31, 2022		515,000	$	52		2,875,000	$	288	$	—	$	(3,718,869	)	$	(3,718,529	)
Net loss				-		—		—		—		(160,007	)		(160,007	)
Balance – June 30, 2022		515,000	$	52		2,875,000	$	288	$	—	$	(3,878,876	)	$	(3,878,536	)



		Class B Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
		Shares		Amount		Capital		Deficit			Deficit
Balance – March 31, 2021 (Inception)	-		—	$	—	$	—	$	—		$	—
Beginning balance	-		—	$	—	$	—	$	—		$	—
Issuance of Class B common stock to Sponsor	-		2,875,000		288		24,712		—			25,000
Net loss			—		—		—		(41,356	)		(41,356	)
Balance - June 30, 2021	-		2,875,000	$	288	$	24,712	$	(41,356	)	$	(16,356	)
Ending balance	-		2,875,000	$	288	$	24,712	$	(41,356	)	$	(16,356	)


	Six Months Ended June 30, 2022			For the period March 31, 2021 (inception) through June 30, 2021
Cash Flows from Operating Activities:
Net loss	$	(698,667	)	$	(41,356	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on marketable securities held in Trust Account		(120,292)			—
Changes in operating assets and liabilities:
Prepaid expenses		70,940			—
Management fees accrued to promissory note – related party		—			40,000
Accounts payable and accrued expenses		229,069			—
Net cash used in operating activities		(518,950	)		(1,356	)

Cash Flows from Financing Activities:
Proceeds from issuance of Class B common stock to Sponsor		—			25,000
Proceeds from issuance of promissory note – related party		—			138,502
Payment of offering costs		—			(160,265	)
Net cash provided by financing activities		—			3,237

Net (decrease)/increase in cash		(518,950)		$	1,881
Cash – Beginning		762,040			—
Cash – Ending	$	243,090		$	1,881

Non-Cash Investing and Financing Activities:
Offering costs included in accrued offering costs	$	—		$	229,061
Deferred offering costs paid by promissory note to related party	$	—		$	48,502
Management fees accrued to promissory note to related party	$	—		$	40,000


	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022						For the period March 31, 2021 (Inception) through June 30, 2021
	Class A common stock			Non- redeemable common stock			Class A common stock			Non- redeemable common stock			Class A common stock		Non- redeemable common stock

Basic and diluted net loss per common stock
Numerator:
Allocation of net loss	$	(123,578	)	$	(36,429	)	$	(539,602	)	$	(159,065	)		—	$	(41,356	)
Denominator:
Basic and diluted weighted average shares outstanding		11,500,000			3,390,000			11,500,000			3,390,000			—		2,500,000
Basic and diluted net loss per common stock	$	(0.01	)	$	(0.01	)	$	(0.05	)	$	(0.05	)		—	$	(0.02	)

No.		Description of Exhibit
1.1		Underwriting Agreement, dated December 20, 2021, by and between the Registrant and EF Hutton, a division of Benchmark Investments, Inc. (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

3.1†		Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

3.3		Bylaws (incorporated by reference to Exhibit 3.3 to the Registrant’s Amendment to Registration Statement on Form S-1 (File No. 333-256473) filed with the Commission on November 22, 2021).

4.1		Right Agreement, dated December 20, 2021 by and between the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

10.1		Letter Agreement, December 20, 2021, by and among the Registrant, its officers and directors, and Sagaliam Sponsor LLC. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 27, 2021).

10.2		Investment Management Trust Agreement, dated December 20, 2021, by and between the Registrant and Continental Stock Transfer & Trust Company, as trustee (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

10.3		Registration Rights Agreement, dated December 20, 2021, by and among the Registrant and certain security holders (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

10.4		Unit Subscription Agreement, dated December 20, 2021, by and between the Registrant and Sagaliam Sponsor LLC. (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

10.5		Administrative Support Agreement by and between the Registrant and Sagaliam Sponsor LLC (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Commission on December 27, 2021).

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 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.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase 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.

†	Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b) (2). The Registrant agrees to furnish supplementally a copy of any omitted exhibit or schedule to the Commission upon its request.

	SAGALIAM ACQUISITION CORP.

Date: August 15, 2022	By:	/s/ Barry Kostiner
	Name:	Barry Kostiner
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: August 15, 2022	By:	/s/ Thomas W. Neukranz
	Name:	Thomas W. Neukranz
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Sagaliam Acquisition Corp.