SEC Form 10-Q filed by APx Acquisition Corp. I

APX ACQUISITION CORP. I

Form 10-Q For the Quarter Ended March 31, 2024

TABLE OF CONTENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

References to “we”, “us”, “our” or the “Company” are to APx Acquisition Corp. I, except where the context requires otherwise. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to APx Cap Sponsor Group I, LLC, a Cayman Islands limited liability company. The following discussion should be read in conjunction with our unaudited condensed financial statements and related notes thereto included elsewhere in this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.

Overview

We are a blank check company incorporated on May 13, 2021, as a Cayman Islands exempted company and incorporated 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 “initial business combination”). We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the private placement of the private placement warrants, the proceeds of the sale of our shares in connection with our initial business combination (pursuant to forward purchase agreements or backstop agreements or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.

The Company’s sponsor is APx Cap Sponsor Group I, LLC (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on December 9, 2021 (the “IPO”). On December 9, 2021, the Company consummated the IPO of 17,250,000 units (the “Units” and, with respect to the shares of Class A ordinary shares included in the Units sold, the “Public Shares”), at a price of $10.00 per Unit, generating gross proceeds of $172,500,000, including 2,250,000 Units issued pursuant to the exercise in full of the underwriters’ over-allotment option. Each Unit consists of one Class A ordinary share, par value $0.0001 per share and one-half of one redeemable 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.

Following the closing of the IPO, an amount of $175,950,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States at Bank of America, N.A., and will be invested only 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 the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company.

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Concurrently with the closing of the IPO, our Sponsor purchased an aggregate of 8,950,000 private placement warrants (the “Private Placement Warrants”) at a price of $1.00 per private placement warrants. Each warrant is exercisable to purchase one Class A ordinary share at $11.50 per share. The proceeds from the Private Placement Warrants were added to the proceeds from the IPO held in the Trust Account (as defined below).

We paid an underwriting discount at the closing of the IPO of $3.45 million. An additional fee of $6.04 million was deferred and would become payable upon our completion of an initial business combination. The deferred portion of the discount would become payable to the underwriters from the amounts held in the Trust Account solely in the event we complete our initial business combination subject to the terms of the underwriting agreement. However, on September 28, 2022, the underwriters waived their right to receive the deferred fee, resulting in a gain from settlement of deferred underwriting commissions of approximately $6.04 million.

The Proposed Business Combination

On March 25, 2024, the Company, OmnigenicsAI Corp, a Cayman Islands exempted company (“OmnigenicsAI”), Heritas Merger Sub Limited, a Cayman Islands exempted company and a direct wholly-owned subsidiary of OmnigenicsAI (“Merger Sub”) and MultiplAI Health Ltd, a private limited company formed under the laws of England and Wales (“MultiplAI” and, together with OmnigenicsAI, the “Target Companies”), entered into a Business Combination Agreement (the “Business Combination Agreement”; capitalized terms used but not defined herein shall have the respective meanings set forth in the Business Combination Agreement, a copy of which is included as an exhibit to this Annual Report). The transactions contemplated by the Business Combination Agreement are referred to herein as the “Proposed Business Combination”.

On August 27, 2024, Parent, MultiplAI and the MultiplAI Shareholders (as defined below) (with the consent of the Company) terminated the MultiplAI SPA (as defined below). As a result of such termination, MultiplAI will not be acquired by OmnigenicsAI, its business will not be combined pursuant to the Business Combination Agreement, and all rights and obligations of MultiplAI under the Business Combination Agreement shall cease and terminate, subject to certain exceptions. Except as set forth above, no other terms of the Business Combination have been modified, and the Company and OmnigenicsAI intend to complete the combination of their businesses (without the acquisition of MultiplAI) as set forth in the Business Combination Agreement.

The Proposed Business Combination

On the Closing Date, prior to the Merger Effective Time, pursuant to the Business Combination Agreement, OmnigenicsAI shall cause the consummation of the Restructuring, pursuant to which all Indebtedness (subject to certain exceptions) owed by OmnigenicsAI or any Subsidiary of OmnigenicsAI to Parent or any shareholder of Parent, shall be cancelled and extinguished. The Indebtedness described in this paragraph that is not required to be canceled and extinguished at Closing shall have their maturity date extended to three years following the Closing Date.

On the Closing Date at the Merger Effective Time, pursuant to the Business Combination Agreement, Merger Sub will merge with and into the Company (with the Company being the surviving company and becoming a direct wholly-owned subsidiary of OmnigenicsAI) (the “Merger”) and, as a result of the Merger, (a) each ordinary share of the Company (“SPAC Ordinary Share”) outstanding will be exchanged for the right to receive one ordinary share of OmnigenicsAI, nominal value $0.0001 per share (“Company Share”), (b) all warrants to purchase SPAC Ordinary Shares (“SPAC Warrants”) will become warrants of OmnigenicsAI (“Company Warrants”) exercisable for Company Shares, on substantially the same terms as the SPAC Warrants and (c) OmnigenicsAI shall enter into an Assignment, Assumption and Amendment Agreement with the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent, to amend and assume the Company’s obligations under the existing Warrant Agreement, dated December 6, 2021, to give effect to the conversion of SPAC Warrants to Company Warrants.

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Conditions to Each Party’s Obligations

The obligations of the parties to consummate the Proposed Business Combination are subject to the satisfaction or waiver of customary closing conditions at or prior to the Closing, including (a) approval by the Company’s shareholders; (b) effectiveness of the registration statement on Form F-4 relating to Company Shares and Company Warrants to be issued in the Merger; (c) Nasdaq listing approval of the Company Shares and Company Warrants; (d) absence of any law, rule, regulation, judgment, decree, executive order or award which is then in effect and has the effect of making the Proposed Business Combination illegal or otherwise prohibiting consummation of the Proposed Business Combination; and I the Company or OmnigenicsAI having at least $5,000,001 of net tangible assets.

The obligation of the Company to consummate the Proposed Business Combination is subject to certain additional conditions at or prior to the Closing, including (a) the accuracy of certain representations and warranties of OmnigenicsAI, MultiplAI and Merger Sub except, with respect to certain representations and warranties required to be true and correct in all respects, where the failure of such representations and warranties to be true and correct does not result in a Company Material Adverse Effect or MultiplAI Material Adverse Effect or is not materially adverse to Merger Sub, as applicable; (b) OmnigenicsAI’s and Merger Sub’s performance or compliance in all material respects with all agreements and covenants required by the Business Combination Agreement; (c) if the MultiplAI SPA has not been terminated in accordance with its terms, MultiplAI’s performance or compliance in all material respects with all agreements and covenants required by the Business Combination Agreement and MultiplAI SPA; (d) the consummation of the RestructurinI(e) the absence of any Company Material Adverse Effect or, if the MultiplAI SPA has not been terminated in accordance with its terms, any MultiplAI Material Adverse Effect; (f) if the MultiplAI SPA has not been terminated in accordance with its terms, the consummation of the MultiplAI Contribution; and (g) OmnigenicsAI having, immediately prior to the Merger Effective Time, (i) no more than 34,000,000 issued and outstanding Company Shares (on a fully diluted basis after consummation of the Restructuring and the MultiplAI Contribution) in addition to any Company Shares issued pursuant to any PIPE Subscription Agreements and the Backstop Agreement; or (ii) if the transactions under the MultiplAI SPA are not consummated and the MultiplAI SPA is terminated, no more than 30,000,000 issued and outstanding Company Shares (on a fully diluted after consummation of the Restructuring), in addition to any Company Shares issued pursuant to any PIPE Subscription Agreements and the Backstop Agreement.

The obligations of OmnigenicsAI and Merger Sub to consummate the Proposed Business Combination are subject to certain additional conditions at or prior to the Closing, including (a) the accuracy of certain representations and warranties of the Company except, with respect to certain representations and warranties, where the failure of such representations and warranties to be true and correct does not result in a SPAC Material Adverse Effect; (b) the performance or compliance in all material respects with all agreements and covenants required by the Proposed Business Combination Agreement; and (c) the absence of a SPAC Material Adverse Effect.

While the obligation of MultiplAI to consummate the Proposed Business Combination is subject to the consummation of the transactions contemplated by the MultiplAI SPA, the obligations of the parties to the Business Combination Agreement (other than MultiplAI) to consummate the Proposed Business Combination is not subject to the consummation of the transactions contemplated by the MultiplAI SPA.

Representations and Warranties

The Business Combination Agreement contains customary representations and warranties of the Company, OmnigenicsAI, MultiplAI and Merger Sub relating to, among other things, their ability to enter into the Business Combination Agreement and the other Transaction Documents to which they are party and their outstanding capitalization. The representations and warranties of the parties contained in the Business Combination Agreement will terminate and be of no further force and effect as of the Closing.

Covenants

The Business Combination Agreement contains customary covenants of the parties, including, among others, covenants providing for (i) the operation of the parties’ respective businesses prior to consummation of the Business Combination, (ii) the parties’ efforts to satisfy conditions to consummate the Business Combination, (iii) the parties’ preparing and OmnigenicsAI filing a registration statement containing a proxy statement/prospectus for the purpose of soliciting proxies from the Company’s shareholders to vote in favor of certain matters and registering under the

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Securities Act of 1933, as amended (the “Securities Act”) the Company Shares and Company Warrants to be issued in connection with the Merger, (iv) the protection of, and access to, confidential information of the parties, (v) the parties’ efforts to obtain necessary approvals from Governmental Authorities, and (vi) the parties’ efforts to obtain PIPE Investments. The covenants of the parties contained in the Business Combination Agreement will terminate and be of no further force and effect as of the Closing, except for those covenants that by their terms require performance after the Closing.

Termination

The Business Combination Agreement may be terminated and the Transactions may be abandoned at any time prior to the Merger Effective Time, notwithstanding any requisite approval and adoption of the Business Combination Agreement and the Proposed Business Combination by the shareholders of the Company, (i) by mutual written consent of OmnigenicsAI and the Company; (ii) by either OmnigenicsAI or the Company if the Merger Effective Time shall not have occurred prior to 5:00 p.m. (New York time) on December 9, 2024, subject to certain exceptions; (iii) by either OmnigenicsAI or the Company if any Governmental Authority shall have enacted, issued, promulgated, enforced or entered any injunction, order, decree or ruling (whether temporary, preliminary or permanent) which has become final and non-appealable and has the effect of making consummation of the Transactions illegal or otherwise preventing or prohibiting consummation of the Transaction or the Merger; (iv) by OmnigenicsAI if the SPAC Shareholders’ Approval shall not have been obtained by reason of the failure to obtain the required vote at the SPAC Shareholders’ Meeting duly convened therefor or at any adjournment thereof; (v) by the Company upon a breach of any representation, warranty, covenant or agreement set forth in the Business Combination Agreement on the part of OmnigenicsAI or Merger Sub, subject to certain exceptions and cure periods set forth in the Business Combination Agreement, such that the conditions relating to representations and warranties and certain covenants and agreements would not be satisfied; (vi) by OmnigenicsAI upon any breach of any representation, warranty, covenant or agreement set forth in the Business Combination Agreement on the part of the Company, subject to certain exceptions and cure periods set forth in the Business Combination Agreement, such that the conditions relating to representations and warranties and certain covenants and agreements would not be satisfied; (vii) by the Company in the event (A) (1) MultiplAI or any of the MultiplAI Shareholders breaches or violates any representation, warranty, covenant, agreement or obligation contained in the MultiplAI SPA, subject to certain exceptions and cure periods set forth in the Business Combination Agreement, such that the conditions relating to representations and warranties and certain covenants and agreements contained in the MultiplAI SPA would not be satisfied, (2) of a MultiplAI Material Adverse Effect, or (3) of a breach of any representation, warranty, covenant or agreement set forth in the Business Combination Agreement on the part of MultiplAI, subject to certain exceptions and cure periods set forth in the Business Combination Agreement, such that the conditions relating to representations and warranties and certain covenants and agreements would not be satisfied, and (B) the Company exercises its right to cause the Parent to terminate the MultiplAI SPA and the MultiplAI SPA is not terminated following the expiration of certain cure periods; and (viii) by the Company if the SEC Required Financials shall not have been delivered by OmnigenicsAI or MultiplAI, on or prior to the applicable deadline specified in the Business Combination Agreement.

In the event that the Business Combination Agreement is terminated, all Transaction Expenses incurred in connection with the Proposed Business Combination shall be paid by the party incurring such Transaction Expenses. If the Transactions are consummated, (a) OmnigenicsAI shall pay or cause to be paid (i) the SPAC Transaction Expenses, subject to the SPAC Transaction Expenses Cap, and (ii) the Company Transaction Expenses at the Closing; and (b) Templar Sponsor shall pay or cause to be paid, (i) all unpaid SPAC Transaction Expenses in excess of the applicable SPAC Transaction Expenses Cap, (ii) any expenses incurred by the Company in its pursuit of potential acquisition or business targets other than the Target Companies or that were not incurred by the Company in connection with or in furtherance of the Proposed Business Combination and (c) all fees and expenses incurred by the Company solely relating to the extension proposals approved by the shareholders of the Company on February 27, 2023, September 7, 2023 and December 8, 2023, which extended the date by which the Company must consummate a business combination.

The foregoing description of the Business Combination Agreement is qualified in its entirety by reference to the full text of the Business Combination Agreement, a copy of which is included as an exhibit to this Annual Report.

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Certain Agreements Related to the Business Combination Agreement

MultiplAI Share Purchase Agreement

On March 13, 2024, Heritas Ltd., a Cayman Islands exempted company (“Parent”), MultiplAI and the holders (the “MultiplAI Shareholders”) of ordinary shares, par value £0.0001, of MultiplAI and any other equity commitments or equity securities of MultiplAI, including any securities or commitments convertible into, exchangeable or exercisable for, or representing the right to subscribe for, any such ordinary shares of MultiplAI (such securities, the “MultiplAI Shares”) entered into that certain amended and restated share purchase agreement (the “MultiplAI SPA”) relating to the sale and purchase of all of the ordinary shares of MultiplAI and, if required under the MultiplAI SPA, all of the MultiplAI Shareholders’ rights and interest in certain equity related agreements and convertible securities, as well as any related ancillary documents or agreements.

On August 27, 2024, Parent, MultiplAI and the MultiplAI Shareholders (with the consent of the Company) terminated the MultiplAI SPA.

Voting and Support Agreement

Concurrently with the execution of the Business Combination Agreement, the Company, Templar Sponsor, OmnigenicsAI and the Parent entered into a Voting and Support Agreement (the “Support Agreement”), pursuant to which, among other things, the Templar Sponsor agreed to vote any of the Sponsor Current Shares (as defined in the Support Agreement) and any SPAC Ordinary Shares held by the Sponsor in favor of the Proposed Business Combination, and Parent agreed to vote any of the Parent Subject Shares (as defined in the Support Agreement) in favor of the Proposed Business Combination.

Additionally, the Support Agreement contains certain covenants to be performed by the parties thereto following the Closing.

The foregoing description of the Support Agreement is qualified in its entirety by reference to the full text of the Support Agreement, a copy of which is included as an exhibit to this Annual Report.

Backstop Agreement

Concurrently with the execution of the Business Combination Agreement, Theo I SCSp, a special limited partnership (société en commandite spéciale) governed by the laws of the Grand Duchy of Luxembourg and a shareholder of Parent (“Theo”), OmnigenicsAI and the Company entered into the Backstop Agreement, pursuant to which, among other things, subject to and conditioned upon the occurrence of the Closing, Theo shall be obligated to obtain the amount (if any) by which $10,000,000 exceeds the aggregate amount of cash on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account) that will remain after payment in full of the SPAC Shareholder Redemption Amount to SPAC Shareholders pursuant to their exercise of the SPAC Shareholder Redemption Right (assuming no SPAC Transaction Expenses have been paid from the Trust Account), and the aggregate amount of cash at the Company or OmnigenicsAI in connection with any PIPE Investment for the benefit of the Company and OmnigenicsAI on the Closing Date, by one or more of the following methods: (i) making on the Closing Date, directly or indirectly, a capital contribution in cash to OmnigenicsAI and, in exchange for such capital contribution, subscribing for and being issued by OmnigenicsAI on the Closing Date, free and clear of all liens, an aggregate number of Company Shares (at a price per Company Share of $10) resulting from dividing the amount of such capital contribution in cash by ten (10) (rounded down to the nearest whole Company Share); and/or (ii) causing SPAC Shareholders who have elected to exercise their SPAC Shareholder Redemption Rights to (A) irrevocably reverse their exercise of the SPAC Shareholder Redemption Rights and not redeem (“Redemption Reversals”), and, (B) transfer all their respective rights, title and interest in all SPAC Ordinary Shares subject to Redemption Reversals, directly or indirectly, to Theo.

The foregoing description of the Backstop Agreement is qualified in its entirety by reference to the full text of the Backstop Agreement, copy of which is included as an exhibit to this Annual Report.

Registration Rights and Lock-Up Agreement

At the Closing, OmnigenicsAI, Parent, the Company, the Templar Sponsor, certain shareholders of the Company and Parent, the MultiplAI Shareholders and the OmnigenicsAI Heritas Key Personnel (as defined in the Registration Rights and Lock-Up Agreement) will enter into the Registration Rights and Lock-Up Agreement pursuant to which, among other things, the holders of the Registrable Securities (as defined in the Registration Rights and Lock-

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Up Agreement) shall have customary demand and piggyback registration rights in connection with the Company Shares held by such holders. Additionally, the Company Shares held by each party to the Registration Rights and Lock-Up Agreement will, subject to certain exceptions, be subject to a lock-up until (i) the date that is twelve (12) months from the Closing Date, and (ii) such date on which the Company completes a liquidation, merger, share exchange or other similar transaction that results in all of the shareholders of the Company having the right to exchange their Company Shares for cash, securities or other property, provided that if the share price of the Company Shares exceeds $12.00 per Company Share (as adjusted for share splits, dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-day trading period, 50% of the Company Shares held by any given party to the Registration Rights and Lock-Up Agreement shall be released from the lock-up.

Results of Operations

Our entire activity from inception up to March 31, 2024 was related to our formation and the IPO. Since the IPO, our activity has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and investments. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. We expect our expenses to increase substantially after this period.

For the three months ended March 31, 2024, we had a net loss of $2,249,261 which was comprised of operating costs of $1,305,094. In this period, we incurred unrealized loss of $1,757,500 related to the change in fair value of warrants and interest income of $813,333 from investments in our Trust Account.

For the three months ended March 31, 2023, we had a net loss of $192,362, which was comprised of operating costs of $920,696, interest income of $1,455,804 from investments in our Trust Account offset by interest expense of $12,414 and $715,056 of unrealized loss on fair value changes of warrants. The operating expenses were primarily due to fees to professionals such as the auditors, legal counsel and consultants, and insurance expenses.

Factors That May Adversely Affect our Results of Operations

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

Liquidity and Capital Resources

As of March 31, 2024, the Company had $568 in cash and a working capital deficit of $2,417,430, excluding accrued interest receivable as it is not available for working capital purposes.

The Company’s liquidity needs up to March 31, 2024 had been satisfied through a payment from the Sponsor of $25,000 (Note 6) for the Founder Shares and the remaining net proceeds from our IPO, the Private Placement Warrants and proceeds from the Promissory Notes. In addition, in order to finance transaction costs in connection with a Business Combination, the Company issued an unsecured promissory note (the “Working Capital Promissory Note”) in the amount of up to $2,000,000, as defined above (Note 7). As of March 31, 2024, the Company has an outstanding principal balance of $1,048,365.

Based on the foregoing, management believes that the Company will not have sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or one year from this filing. As such, the Company may need to obtain alternative liquidity and capital resources to meet its needs,

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which may not be available to the Company. Over this time period, the Company will be using any available funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Account Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The Company has until December 9, 2024 (36 months from the closing of the IPO) if we further extend the period by up to twelve additional one-month periods, to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution, as well as insufficient cash flows, raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Other Contractual Obligations

Administrative Services Agreement

Commencing on the date of the prospectus and until completion of the Company’s initial business combination or liquidation, the Company may reimburse an affiliate of the Sponsor up to an amount of $10,000 per month for office space and secretarial and administrative support provided to members of the Company’s management team. In connection with the Sponsor Alliance Transaction, the Company and APx Sponsor Group I terminated the administrative services agreement as of August 30, 2023, and no fees remain outstanding thereunder.

Registration Rights

The holders of Founder Shares, Private Placement Warrants, and securities that may be issued upon conversion of working capital loans, if any, (and in each case holders of their component securities, as applicable) will be entitled to registration rights pursuant to a registration rights agreement dated as of December 6, 2021, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A ordinary shares). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, these holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters were paid a cash underwriting discount of $3,450,000, or $0.20 per unit of the gross proceeds of the initial 17,250,000 Units (inclusive of 2,250,000 Unit over-allotment option) sold in the IPO, in the aggregate. In addition, the underwriters are entitled to a deferred fee of (i) $0.35 per unit of the gross proceeds of the initial 15,000,000 Units sold in the IPO, or $5,250,000, and (ii) $0.35 per unit of the gross proceeds from the 2,250,000 Units sold pursuant to the over-allotment option, or $787,500, aggregating to a deferred fee of $6,037,500. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we complete an initial business combination, subject to the terms of the underwriting agreement.

Effective as of September 28, 2022, the underwriters from the Initial Public Offering resigned and withdrew from their role in the Business Combination and thereby waived their right to the deferred underwriting commissions in the amount of $6,037,500, which the Company has recorded as a gain on settlement of underwriter fees on the statement of shareholders’ equity for the year ended December 31, 2022 for $5,788,453, which represents the original amount recorded to accumulated deficit, and the remaining balance representing the original amount recorded to the statement of operations of $249,047 was recorded for the year ended December 31, 2022. No deferred underwriting commissions remain outstanding as of December 31, 2023, and March 31, 2024.

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Critical Accounting Policies

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 (“U.S. GAAP”).

The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues 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 historical experience, 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. The Company has identified the following as its critical accounting policies:

Warrant Liabilities

The Company accounts for warrants based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s 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 quarterly period end date while the warrants are outstanding.

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. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including 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) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s 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, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet.

Net Income Per Ordinary Share

We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average shares of ordinary shares outstanding for the respective period.

The calculation of diluted net income does not consider the effect of the warrants underlying the Units sold in the IPO (including the consummation of the Over-allotment) and the Private Placement Warrants to purchase an aggregate of 17,575,000 Class A ordinary shares in the calculation of diluted income per share, because their inclusion would be anti-dilutive under the treasury stock method. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.

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Off-Balance Sheet Arrangements

As of March 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

Recent Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to enhance the decision usefulness of income tax disclosures and requires the disclosure of various disaggregated information, including an entity’s effective tax rate reconciliation as well as additional information on taxes paid. This ASU is effective on a prospective basis for annual periods beginning after December 15, 2024, with early adoption allowed. The Company is currently assessing the impact, if any, ASU 2023-09 would have on its disclosures.

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

JOBS Act

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be 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, our 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 independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (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 PCAOB regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm 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 CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.

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ITEM 3. 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 required under this item.

ITEM 4. 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 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 Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective, as of March 31, 2024, because of material weaknesses in our internal control over financial reporting related to errors in warrant liabilities, errors in proper accounting of related party gains, classification of temporary and permanent equity, classification error in statement of cash flows, and accuracy and completeness of accounts payable and accrued expenses, accrued interest receivable and redemption value of ordinary shares subject to redemption. The detection of errors did not trigger a financial restatement and had no impact on previously issued financial statements.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Remediation Plan

The Chief Executive Officer and Chief Financial Officer performed additional post-closing review procedures including reviewing historical filings and consulting with subject matter experts related to the accounting for warrant liabilities. The Company’s management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we have improved, and will continue to improve, these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.

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

Other than the matters discussed above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 6. EXHIBITS.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

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SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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