SEC Form 10-Q filed by Moringa Acquisition Corp

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, 2024

☐ 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. 001-40073

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

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.

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 13, 2024, 3,442,721 Class A ordinary shares, par value $0.0001 per share and one Class B ordinary share, par value $0.0001 per share, were issued and outstanding. The outstanding Class A ordinary shares consisted of (i) 87,722 public shares, (ii) 2,874,999 sponsor-held founders shares (previously converted to Class A ordinary shares from Class B ordinary shares), (iii) 380,000 private shares (held by the sponsor and EarlyBirdCapital, Inc., in the aggregate) and (iv) 100,000 representative shares held by EarlyBirdCapital, Inc.

MORINGA ACQUISITION CORP

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

CERTAIN TERMS

Unless otherwise stated in this Quarterly Report on Form 10-Q (this “Quarterly Report” or “Form 10-Q”), references to:

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, and Section 21E of the Securities Exchange Act of 1934, as amended, 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 statements in “Part 1, Item 2. 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. Forward-looking statements in this Quarterly Report may include, for example, statements about:

The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. For information regarding important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to “Part I, Item 1A. Risk Factors” in our 2023 Annual Report and “Part II, Item 1A. Risk Factors” contained herein. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.report. Except as expressly required by applicable securities laws, 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.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024 AND FOR THE THREE AND SIX MONTHS ENDED ON THAT DATE

U.S. DOLLARS

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2024 AND FOR THE THREE AND SIX MONTHS ENDED ON THAT DATE

INDEX

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL DEFICIENCY

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MORINGA ACQUISITION CORP

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

MORINGA ACQUISITION CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MORINGA ACQUISITION CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued):

MORINGA ACQUISITION CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued):

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NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued):

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (continued):

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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MORINGA ACQUISITION CORP

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

MORINGA ACQUISITION CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

MORINGA ACQUISITION CORP

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NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (continued):

MORINGA ACQUISITION CORP

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NOTE 4 - RELATED PARTY TRANSACTIONS (continued):

MORINGA ACQUISITION CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and our audited financial statements and related notes thereto as of, and for the year ended, December 31, 2023, included in our 2023 Annual Report.

Overview

We are a blank check company incorporated 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. We completed our initial public offering in February 2021, and since that time, we have engaged in discussions with potential business combination target companies. In June 2022, we entered into the Holisto Business Combination Agreement with Holisto, which was terminated in August 2023. In February 2024, we entered into the Original Silexion Business Combination Agreement with Silexion, which was amended and restated in April 2024 pursuant to the Silexion Business Combination Agreement, which itself was modified pursuant to the Silexion Waiver Letter entered into on June 18, 2024, as described in “Recent Developments” below in this Item 2. We intend to effectuate our prospective Silexion Business Combination via a “double dummy” structure with both Moringa and Silexion merging with subsidiaries of New Pubco, a newly formed entity. The operations of New Pubco and its subsidiaries (most importantly, Silexion) will be funded from one of a number of alternative sources upon the closing of the Silexion Business Combination: (i) remaining cash, if any, in the trust account from the proceeds of our initial public offering and the private placements of the private units (following the payment of funds (x) for redemptions of public shares and (y) to EarlyBirdCapital pursuant to the Marketing Agreement, in each case in connection with the Silexion Business Combination); (ii) cash from a new financing involving the sale of Silexion’s or Moringa’s equity prior to the closing of the Silexion Business Combination and/or New Pubco’s equity at the closing of the Silexion Business Combination; (iii) existing working capital of Silexion; and/or (iv) cash from one or more convertible debt financings.

The issuance by New Pubco of ordinary shares to Silexion’s shareholders in the Silexion Business Combination:

Similarly, if New Pubco issue(s) debt securities or otherwise incur(s) significant indebtedness in connection with the Silexion Business Combination, that could result in:

As indicated in the accompanying financial statements, at June 30, 2024 we had approximately $18 thousand of cash and cash equivalents and an accumulated deficit of approximately $3.386 million. Although we raised $115.0 million of gross proceeds, in the aggregate, from our initial public offering in February and March 2021, and an additional $3.8 million of gross proceeds, in the aggregate, from our private placements consummated concurrently with the closings of our initial public offering, approximately $90.8 million and $22.2 million of the investments in our trust account were liquidated and the cash received upon liquidation was paid out as part of the redemption of public shares in connection with the First Extension Meeting and Second Extension Meeting, respectively, leaving approximately $5.924 million in the trust account as of June 30, 2024. Redemptions of public shares following June 30, 2024, in connection with the Extraordinary Silexion Business Combination Approval Meeting, has further reduced the balance of funds in the trust account. We furthermore expect to continue to incur significant costs that will be paid from funds in our bank account outside of the trust account in completing the prospective Silexion Business Combination. We cannot assure you that our plans to complete the Silexion Business Combination or any other potential initial business combination, or a related capital-raise, will be successful.

Recent Developments

Amendment and Restatement of Original Silexion Business Combination Agreement

On April 3, 2024, we and Silexion restructured the transactions contemplated under the Original Silexion Business Combination Agreement by entering into the Silexion Business Combination Agreement with New Pubco, Merger Sub 1, Merger Sub 2, and Silexion. The Silexion Business Combination Agreement amended and restated, in its entirety, the Original Silexion Business Combination Agreement. The Silexion Business Combination Agreement and the Silexion Business Combination were unanimously approved by the boards of directors of Moringa and Silexion, by virtue of their prior approval of the Original Silexion Business Combination Agreement and all changes approved by an officer or director of Moringa or Silexion, respectively.

Pursuant to the restructured transactions, New Pubco, a newly formed entity that will serve as the public company upon completion of the Silexion Business Combination, has two merger subsidiaries— Merger Sub 2, which will merge with and into Moringa, with Moringa continuing as the surviving company and a wholly-owned subsidiary of New Pubco (the “SPAC Merger”), and Merger Sub 1, which will merge with and into Silexion, with Silexion continuing as the surviving company and a wholly-owned subsidiary of New Pubco (the “Acquisition Merger”).

Upon the effectiveness of the SPAC Merger, each outstanding Moringa Class A ordinary share and the sole outstanding Moringa Class B ordinary share will convert into an ordinary share of New Pubco on a one-for-one basis. Each outstanding warrant to purchase one Moringa Class A ordinary share will convert into a warrant to purchase one New Pubco ordinary share, at the same exercise price.

Upon the effectiveness of the Acquisition Merger, each outstanding ordinary share and preferred share of Silexion will convert into such number of ordinary shares of New Pubco as is equal to the quotient obtained by dividing (x) the quotient obtained by dividing (1) $62.5 million by (2) the number of fully diluted Silexion equity securities, by (y) $10.00 (the “Silexion Equity Exchange Ratio”). Each outstanding Silexion warrant and Silexion option to purchase one Silexion share, and Silexion restricted share unit (RSU) that may be potentially settled for one Silexion share, will become exercisable for, or will be subject to settlement for (as applicable), such number of New Pubco ordinary shares as are equal to the Silexion Equity Exchange Ratio. The exercise price per New Pubco ordinary share of each such converted Silexion option and Silexion warrant will be adjusted based on dividing the existing per share exercise price by the Silexion Equity Exchange Ratio. The terms of vesting, exercise and/or settlement, as applicable, of such converted options, warrants and RSUs shall remain the same following such conversion, except that the vesting of each Silexion option will accelerate immediately prior to the Acquisition Merger, such that the New Pubco option into which it has been converted will be fully vested.

In addition to the delivery by Moringa, New Pubco, Merger Sub 1 and Merger Sub 2 of customary certificates and other closing deliverables, the obligation of Silexion to consummate the transactions is subject to certain conditions as further described in the Silexion Business Combination Agreement.

Moreover, in connection with the Silexion Business Combination Agreement, each of the sponsor and certain shareholders of Silexion have entered or will enter into certain additional agreements, including: a shareholder voting and support agreement with New Pubco, Silexion and Moringa; sponsor support agreement with New Pubco, Silexion and Moringa; Amended Registration Rights and Lock-Up Agreement by and among Moringa, EarlyBirdCapital and the sponsor; and an amended & restated sponsor promissory note to be issued by New Pubco to the sponsor.

The foregoing description of the Silexion Business Combination and related transactions does not purport to be complete. For further information and access to the full agreement and all related agreements, please refer to our Current Report on Form 8-K filed with the SEC on April 3, 2024.

Entry into Silexion Waiver Letter

On June 18, 2024, Moringa, on behalf of New Pubco, Merger Sub 1 and Merger Sub 2 (collectively the “Moringa Parties”), entered into the Silexion Waiver Letter with Silexion that waived and/or modified certain financing-related and other terms of the Silexion Business Combination Agreement. In particular, under the Silexion Waiver Letter, Moringa and each other Moringa Party agreed to waive Silexion’s obtaining at least $3.5 million of equity financing from investors as a condition precedent to the obligations of the Moringa Parties to complete the Silexion Business Combination, which financing had not been obtained to date by Silexion.

In consideration of that waiver by the Moringa Parties, Silexion waived the condition precedent of its obligation to complete the Silexion Business Combination that the sponsor invest at least $350,000 in New Pubco (the “Sponsor Investment”). While the Sponsor is no longer required to complete the Sponsor Investment, it will nevertheless be entitled to be issued, upon completion of the Silexion Business Combination, 1,382,325 of the New Pubco ordinary shares to which it could have potentially been entitled in connection with the Sponsor Investment, without being subject to a surrender of a portion of those shares due to a deficiency in the amount of its investment, as had been provided for by the Silexion Business Combination Agreement.

Moreover, the Silexion Waiver Letter also increased the cap on the amount of working capital and other loans by the sponsor to Moringa for which the sponsor may be repaid via the conversion of loaned amounts into ordinary shares of New Pubco following the closing of the Silexion Business Combination, from $5.2 million to $5.5 million. Under the Silexion Business Combination Agreement, that capped amount will be reduced by any fee or expense that will be paid or owed by Moringa under the Marketing Agreement to which it is party with EarlyBirdCapital.

Lastly, the Silexion Waiver Letter also provided that upon the closing of the Silexion Business Combination, Ilan Levin, who will serve as a director of New Pubco, will be entitled to a monthly fee of $10,000 for a period of 36 months.

The foregoing description of the Silexion Waiver Letter does not purport to be complete. For further information and access to the full Silexion Waiver Letter, please refer to our Current Report on Form 8-K filed with the SEC on June 18, 2024.

Filing and Effectiveness of Form S-4 Registration Statement for Silexion Business Combination

In connection with the proposed Silexion Business Combination, New Pubco, Moringa and Silexion prepared, and New Pubco filed with the SEC, on May 9, 2024, a Registration Statement on Form S-4 that includes a document that serves as a prospectus for the securities to be issued by New Pubco in the Silexion Business Combination and a proxy statement of Moringa for the Extraordinary Silexion Business Combination Approval Meeting. The SEC staff declared the New Pubco Registration Statement effective on July 16, 2024.

Approval of Cure Period by Nasdaq for Nasdaq Deficiency Notice

As previously reported, on February 20, 2024, we received a notice from the staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that unless we would timely request a hearing before the Nasdaq Hearings Panel (the “Panel”), trading of our securities on The Nasdaq Capital Market would be suspended at the opening of business on February 29, 2024, due to our non-compliance with Nasdaq IM-5101-2, which requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its initial public offering registration statement.

We timely requested a hearing before the Panel, which resulted in a stay of any suspension or delisting action pending the hearing. On April 23, 2024. we participated in the hearing before the Panel, at which we presented our request that Nasdaq provide us with an additional six months to remedy our non-compliance with Nasdaq IM-5101-2. Our plan for regaining compliance focused on our efforts to complete our previously disclosed Silexion Business Combination. On May 10, 2024, we received the Panel’s ruling for the hearing, in which the Panel approved our request for a six-month extension— until the Second Extension Date— to remain listed on Nasdaq and complete our initial business combination.

Entry into Advisory and Placement Agent Agreement with Cohen & Company

On July 29, 2024, we entered into a letter agreement with J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“Cohen & Company”) pursuant to which Cohen & Company will provide us capital markets advisory and placement agent services. Under that agreement, Cohen & Company agreed to serve as (i) our capital markets advisor in connection with our completion of the Silexion Business Combination and (ii) our placement agent for a private placement of equity, equity-linked, convertible and/or debt securities to be consummated in connection with the Silexion Business Combination (any such private placement fund raising activity, a “financing transaction”).

Among the other services that it will provide for us under the agreement, Cohen & Company will: assist us with identifying financing opportunities to optimize our execution, and de-risk the closing process, of the Silexion Business Combination; provide capital markets advice to us and New Pubco on the financial aspects and terms and conditions of a financing transaction; assist us in placing a line of credit with respect to equity, equity-linked, and convertible securities (an “ELOC”); and advising and assisting our/New Pubco’s senior management on customary presentations to be used in “road show” and other meetings with investors and other interested persons in connection with the Silexion Business Combination and a financing transaction.

As compensation for the services to be provided to us under the agreement, we have agreed to pay Cohen & Company the following fees:

The payment of each of the advisor fee and the transaction fee is conditioned on the closing of the Silexion Business Combination.

We have also agreed to reimburse Cohen & Company and its affiliates for any reasonable and documented out-of-pocket expenses, plus any sales, use or similar taxes (including additions to such taxes, if any) on any such expenses, subject to a $15,000 limit (unless we consent in writing to reimbursement of an amount exceeding that limit). We have furthermore agreed to customary indemnification and/or contribution to Cohen & Company for any liability arising for it out of the Silexion Business Combination, a financing transaction or our engagement of Cohen & Company. Such obligation of ours is subject to customary exclusions.

Results of Extraordinary Silexion Business Combination Approval Meeting

On August 6, 2024, we held the Extraordinary Silexion Business Combination Approval Meeting at which our shareholders considered various proposals related to the Silexion Business Combination. At the meeting, our shareholders approved each of the following proposals (which were described in the proxy statement/prospectus that we filed with the SEC under cover of Schedule 14A on July 17, 2024), by the requisite majority described below:

In connection with the votes on all three proposals held at the meeting, our public shareholders elected to redeem, and did not reverse such election with respect to, 427,297 public shares.

Upon completion of those redemptions, (i) 3,442,721 Class A ordinary shares, in the aggregate (consisting of 87,722 public shares, 2,874,999 Class A ordinary shares that are founders shares held by the sponsor, 380,000 private shares (held by the sponsor and EarlyBirdCapital, in the aggregate), and 100,000 representative shares), and (ii) one Class B ordinary share (held by the sponsor), remain issued and outstanding.

Results of Operations and Known Trends or Future Events

We have not engaged in any revenue-generating operations to date. Our only activities since inception have been organizational activities, preparations for our initial public offering and, subsequent to our initial public offering, searching for, and due diligence related to, potential target companies with which to consummate a business combination transaction. We have not and will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on investments held in our trust account after our initial public offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the June 30, 2024 date of our financial statements contained in this Quarterly Report. After our initial public offering, which was consummated in February and March 2021, we have been incurring increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for our activities related to an initial business combination (originally, the Holisto Business Combination, and recently, the Silexion Business Combination).

Liquidity and Capital Resources

We have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans.

Pre-IPO Financing Source

In early 2021, prior to the completion of our IPO, our liquidity needs were satisfied from the availability of up to $300,000 in loans from our sponsor under an unsecured promissory note, under which we had initially borrowed $150,000 prior to December 31, 2020 and an additional $20,000 in February 2021. The total $170,000 balance owed under the note was repaid in March 2021 following the closings of our initial public offering.

IPO and Post-IPO Funding— Trust Account

At the time of our IPO in February and March 2021, we raised $116.2 million of net proceeds from (i) the sale of public units to the public in the offering, after deducting offering expenses of approximately $300 thousand and underwriting commissions of $2.3 million (but excluding an advisory fee of up to $4.025 million that may be payable to the representative of the underwriters for services that may be performed for us under the Marketing Agreement in connection with (and subject to the consummation of) our initial business combination transaction), and (ii) the sale of private units for a purchase price of $3.8 million in the aggregate. Of that $116.2 million amount, $115 million (including up to $4.025 million for a potential advisory fee to EarlyBirdCapital under the Marketing Agreement) was deposited into the trust account. The funds in the trust account were invested only in specified U.S. government treasury bills or in specified money market funds. The remaining $1.2 million was not placed in the trust account. As of June 30, 2024, we had approximately $5.924 million of investments held in that trust account, all of which was invested in Goldman Sachs money market funds. Following June 30, 2024, on July 11, 2024, in order to mitigate the risk of our being deemed an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we instructed Continental Stock Transfer & Trust Company, at which the trust account is held, to liquidate the investments in the trust account and to move the cash held in the trust account into an interest-bearing demand deposit account held at JPMorgan Chase Bank, N.A. The sponsor committed to funding an additional $12.9 thousand approximately to the trust account on the 19^th day of each month, beginning in August 2023 until (but not including) August 19, 2024, for up to $154.5 thousand approximately in total, for so long as we have not yet completed an initial business combination or determined to liquidate our company. The last such funding took place on July 19, 2024.

We intend to use substantially all of the investments held in the trust account (after reduction for payments to redeeming shareholders) including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and excluding the potential advisory fee to be payable to EarlyBirdCapital for advisory services under the Marketing Agreement), to fund our post- business combination company. We may withdraw from the trust account interest to pay taxes, if any. Our annual income tax obligations depend on the amount of interest and other income earned on the amounts held in the trust account. The remaining proceeds held in the trust account (following the payment of amounts to shareholders who redeemed shares in connection with the Extraordinary Silexion Business Combination Approval Meeting) will be used as working capital to finance the operations of New Pubco (or any other company surviving from our initial business combination), make other acquisitions and pursue our growth strategies.

Subsequent to our initial public offering, our working capital has been funded exclusively by our sponsor, as evidenced by promissory notes that we have issued to our sponsor throughout the post-IPO period.

As of June 30, 2024, we had approximately $18 thousand of cash deposited in our bank account held outside of the trust account. We intend to use those funds and any additional funding that we have subsequently received and may receive from our sponsor and that we hold outside of the trust account primarily towards activities related to our prospective Silexion Business Combination (or any other business combination). Those activities include, in primary part, completing the Silexion Business Combination, securing financing for the post-business combination company, paying for administrative and support services, and paying taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes. In addition, we use those funds outside of the trust account for payment of legal and accounting fees related to regulatory reporting requirements, including Nasdaq and other regulatory fees, and funds for working capital to cover miscellaneous expenses and reserves.

In order to fund working capital deficiencies or finance transaction costs in connection with the prospective Silexion Business Combination or any other initial business combination, our sponsor or an affiliate of our sponsor may, but is not obligated to, loan us additional funds as may be required. If we complete our initial business combination, we would repay such loaned amounts, subject, however, to the cap on repayment under the A&R Sponsor Promissory Note described in the next paragraph below. In the event that our initial business combination does not close, we may use a portion of the working capital held outside of the trust account to repay such loaned amounts, but no proceeds from our trust account would be used for such repayment. Under the existing terms of those loans from the sponsor, up to $1.5 million of such loans (all of which has been committed to us by our sponsor already) may be converted into warrants at a price of $1.00 per warrant at the option of the sponsor, as lender. The warrants would be identical to the private warrants issued to our sponsor. We do not expect to seek loans from parties other than our sponsor or an affiliate of our sponsor, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our trust account.

Under the terms of the Silexion Business Combination, as modified by the Silexion Waiver Letter, all such amounts owed to the sponsor under existing promissory notes will be represented by a single amended and restated sponsor promissory note (the “A&R Sponsor Promissory Note”) to be issued to our sponsor by New Pubco, as assignee of Moringa, under which the total amount owed by New Pubco (as assignee of Moringa) to the sponsor through the closing date of the business combination will be subject to a cap of (i) $5.5 million, minus (ii) any fee or expense that may be paid or owed by us pursuant to the Marketing Agreement. Any outstanding amount loaned by the sponsor to our company in excess of that cap will be attributed to the conversion shares issuable under the A&R Sponsor Promissory Note as additional paid-in capital. The maturity date of the A&R Sponsor Promissory Note will be the 30-month anniversary of the closing date of the Silexion Business Combination. Amounts outstanding under the A&R Sponsor Promissory Note may be repaid (unless otherwise decided by Moringa) only by way of conversion into New Pubco ordinary shares. The sponsor may also convert amounts outstanding under the A&R Sponsor Promissory Note at the price per share at which New Pubco conducts an equity financing following the closing of the business combination, subject to a minimum conversion amount of $100 thousand, in an amount of shares constituting up to thirty percent (30%) of the number of ordinary shares issued and sold by New Pubco in such equity financing. The sponsor may also elect to convert amounts of principal outstanding under the note into New Pubco ordinary shares at any time following the twenty-four (24) month anniversary of the closing date, subject to a minimum conversion of $10 thousand, at a price per share equal to the volume weighted average price of the New Pubco ordinary shares on the principal market on which they are traded during the twenty (20) consecutive trading days prior to the conversion date.

We have been borrowing additional funds from our sponsor in order to satisfy our liquidity needs in our pursuit of an initial business combination. At June 30, 2024, we had an aggregate of $3,346,000 outstanding under existing promissory notes that we had issued to the sponsor (including for sponsor loans that were contributed to the trust account in connection with the First Extension and Second Extension). We have been borrowing additional funds from our sponsor after June 30, 2024 as our working capital needs have been increasing concurrently with our progress towards completing the Silexion Business Combination.

We cannot assure you that we will be able to successfully consummate the prospective Silexion Business Combination or any other initial business combination.

After June 30, 2024, in connection with the Extraordinary Silexion Business Combination Approval Meeting held on August 6, 2024, our shareholders redeemed an additional 427,297 public shares, which has further reduced, by approximately $4.8 million, the funds in the trust account that will become available to New Pubco upon the closing of the Silexion Business Combination. New Pubco will likely need to issue additional securities or incur debt at or following the closing of the Silexion Business Combination if cash on hand is insufficient, in order to meet the ongoing working capital requirements of Silexion’s operations.

There can be no assurance that we will be able to consummate the Silexion Business Combination or obtain sufficient funding to complete the Silexion Business Combination. If we are unable to complete the Silexion Business Combination or any other initial business combination, we will be forced to cease operations and liquidate our trust account, which liquidation would be less than 12 months after the date of this Quarterly Report. Please see Note 1(e) to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the substantial doubt regarding our ability to continue as a “going concern”.

Review of Cash Flows for the Six Months Ended June 30, 2024

Cash used in operating activities

For the six months ended June 30, 2024 net cash used in operating activities was approximately $369 thousand. That cash used in operating activities reflected our net loss of approximately $311 thousand for the period, as adjusted to reflect the following matters:

Cash provided by financing activities

For the six months ended June 30, 2024, net cash provided by financing activities was approximately $505 thousand, reflecting funds that we borrowed from our sponsor under the promissory notes that we have issued to our sponsor.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2024. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below:

Administrative Services Agreement with Sponsor

In connection with the IPO, we entered into an agreement to pay the sponsor a monthly fee of $10 thousand for office space, and administrative and support services, provided to our company. We began incurring those fees on February 19, 2021 and will continue to incur those fees monthly until the earlier of our completion of a business combination or our liquidation.

Marketing Agreement with EarlyBirdCapital

At the time of the IPO, we engaged EarlyBirdCapital under the Marketing Agreement as an advisor in connection with our initial business combination, to assist in holding meetings with our shareholders to discuss the potential business combination and the target business’ attributes, to introduce us to potential investors that are interested in purchasing the surviving public company’s securities in connection with our initial business combination, to assist in obtaining shareholder approval for the business combination, and to assist with press releases and public filings in connection with our initial business combination. Under that engagement, we agreed to pay EarlyBirdCapital a cash fee for such services upon the consummation of our initial business combination in an amount equal to 3.5% of the gross proceeds of the IPO, or $4.025 million (exclusive of any applicable finders’ fees which might become payable). We are engaging in negotiations with EarlyBirdCapital to reduce the amount of that cash fee. We cannot provide any assurances as to the outcome of those negotiations.

Advisory and Placement Agent Agreement with Cohen & Company

On July 29, 2024, we entered into an advisory and placement agent services agreement with Cohen & Company. Please see a description of our potential obligations under that agreement under “Recent Developments— Entry into Advisory and Placement Agent Agreement with Cohen & Company” above in this Item 2.

Critical Accounting Estimates

Private Warrant Liability

Please refer to Note 6 - Fair Value Measurements to our unaudited condensed consolidated financial statements for the method and level 3 inputs used for the measurement of the Private Warrant Liability.

No sensitivity analysis was provided, as the range of reasonably possible inputs would not have a material impact on our unaudited condensed consolidated financial statements taken as a whole.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The net proceeds of our initial public offering and the sale of the private units held in the trust account were invested, until July 11, 2024, in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act that maintained a stable net asset value of $1.00, which invested only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, there were no associated material exposure to interest rate risk. On July 11, 2024, we instructed Continental Stock Transfer & Trust Company, acting as trustee, to liquidate those investments in our trust account and to invest the proceeds from those investments in a demand deposit interest-bearing bank account. The interest accruing in that account is subject to fluctuation based on market changes in interest rates. We do not believe that any fluctuation in market interest rates will materially impact the value of the funds in the trust account.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our chief executive officer and chief financial officer, whom we refer to as our Certifying Officers, the effectiveness of our disclosure controls and procedures as of June 30, 2024, pursuant to Rule 13a-15(b) or Rule 15d-15(b) under the Exchange Act.

Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2024 because of the material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a 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. Specifically, our management has concluded that our control around the interpretation and accounting for certain complex features of our Class A ordinary shares and private placement warrants was not effectively designed or maintained. This material weakness resulted in the restatement of our audited financial statement as of March 3, 2021. Additionally, this material weakness could result in a misstatement of the warrant liability (for our private placement warrants), Class A ordinary shares and related accounts and disclosures that would result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis.

Since that time, we have been implementing a number of measures to remediate such material weaknesses; however, as of June 30, 2024 management has not remediated the material weakness. If we are unable to remediate our material weaknesses in a timely manner or we identify additional material weaknesses, we may be unable to provide required financial information in a timely and reliable manner and we may incorrectly report financial information. The existence of material weaknesses in internal control over financial reporting could adversely affect our reputation or investor perceptions of us, which could have a negative effect on the trading price of our shares. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. Even if we are successful in strengthening our controls and procedures, in the future those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

Factors that could cause our actual results to differ materially from our expectations, as described in this Quarterly Report, include the risk factors described in Part I, Item 1A, of our 2023 Annual Report. As of the date of this Quarterly Report, there have been no material changes to those risk factors, except as stated below.

Our proposed business combination with Silexion, a company located in Israel, may be subject to a variety of additional risks that may negatively impact the operations of the combined company.

Because we seek an initial business combination with Silexion, a company that is located in Israel, we may face additional burdens in completing our initial business combination, and if we effect such business combination, we could be subject to a variety of additional risks that may negatively impact the operations of New Pubco.

Since the establishment of the State of Israel in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries and terrorist organizations active in the region. These conflicts have involved missile strikes, hostile infiltrations and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. Following the attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. Since the commencement of these events, there have been continuous hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and occasional attacks by the Houthi terror organization in Yemen.

In addition, on April 13, 2024, Iran launched an aerial attack on Israel through the use of cruise and ballistic missiles along with suicide drones. While Israel repelled the Iranian attack, including through the assistance of the Unites States, France, the United Kingdom, and Jordan, the attack by Iran signaled an escalation in the regional conflict and the potential for larger regional conflict, which may bring additional countries into the sphere of conflict.

The intensity and duration of Israel’s current war against each of Hamas and Hezbollah, along with any additional regional conflict, is difficult to predict, as are the economic implications of the war on the business and operations on Silexion or any other target company with which we may combine, and on Israel’s economy in general. These events may cause wider macroeconomic deterioration in Israel, which may have a material adverse effect on our ability to effectively complete the Silexion Business Combination, or on the operations of New Pubco.

In connection with the Israeli security cabinet’s declaration of war against Hamas and possible hostilities with other organizations, several hundred thousand Israeli military reservists were drafted to perform immediate military service. Certain of our executives and board members live in Israel, and employees of Silexion, or its service providers, may be located in Israel, and may have been called, or will be called, for service in the current or future wars or other armed conflicts with Hamas, and such persons may be unavailable for extended periods of time. Any armed conflicts, terrorist activities or political instability in the region could adversely affect business conditions, could harm Silexion’s results of operations and could make it more difficult for Silexion to raise capital. Parties with whom Silexion does business may decline to travel to Israel during periods of heightened unrest or tension, forcing Silexion to make alternative arrangements when necessary in order to meet its business partners face to face. In addition, the political and security situation in Israel may result in parties with whom Silexion has agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements. Further, in the past, the State of Israel and Israeli companies have been subjected to economic boycotts. Several countries still restrict business with the State of Israel and with Israeli companies. These restrictive laws and policies may have an adverse impact on Silexion’s operating results, financial condition or the expansion of its business.

We are currently not in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq’s listing requirements, our securities could be delisted, which could affect our securities’ market price and liquidity, and could also frustrate our ability to complete the Silexion Business Combination. 

On February 20, 2024, we received a written notice (the “Notice”) from the Nasdaq Listing Qualifications Department indicating that unless we timely request a hearing before the Nasdaq Hearings Panel (the “Panel”), trading of our securities on the Nasdaq was to be suspended at the opening of business on February 29, 2024, due to our non-compliance with Nasdaq IM-5101-2, which requires that a special purpose acquisition company complete one or more business combinations within 36 months of the effectiveness of its IPO registration statement. We requested a hearing before the Panel, which took place on April 23, 2024 and thereby averted a suspension in trading of the Moringa securities. Based on that hearing, we have been granted a six-month extension, until August 19, 2024, to regain compliance with that Nasdaq listing requirement by consummating the Silexion Business Combination.

We cannot assure you that we will be able to regain compliance with Nasdaq IM-5101-2 and maintain compliance with all other Nasdaq continued listing requirements. The sole means to regain compliance and remedy our current non-compliance is to complete the Silexion Business Combination (or any other potential business combination) prior to the end of the extension period. Therefore, if we fail to complete the Silexion Business Combination by the six-month deadline, we will likely be unable to fulfill the closing condition under the Silexion Business Combination Agreement that the New Pubco ordinary shares be accepted for listing on Nasdaq. That, in turn, could lead to the termination of the Silexion Business Combination Agreement, which could cause us to liquidate, as a result of which public shareholders may only receive their proportional share of the current funds in the trust account, or less. Even if we do not liquidate, the delisting of our securities from Nasdaq could adversely affect the market price and liquidity of our securities, which would likely continue to trade in the over-the-counter market instead.

If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted, which may cause us to abandon our efforts to complete an initial business combination and instead liquidate Moringa.

On January 24, 2024, the SEC adopted final rules governing special purpose acquisition companies (the “SPAC Final Rules”), which became effective on July 1, 2024. Among other items, the SPAC Final Rules provide interpretive guidance describing the extent to which special purpose acquisition companies (“SPACs”) could become subject to regulation under the Investment Company Act (the “Guidance”). In particular, the Guidance provided that like any other issuer, a SPAC may meet the definition of investment company under Section 3(a)(1)(A) or 3(a)(1)(C) of the Investment Company Act or both, depending on the facts and circumstances. Under Section 3(a)(1)(C), if a SPAC owns or proposes to acquire 40% or more of its total assets in investment securities, it would likely need to register under the Investment Company Act unless an exclusion from the definition applies. However, in the context of Section 3(A)(1)(A), the Guidance clarified that whether a SPAC is subject to the Investment Company Act is a question dependent on the particular facts and circumstances of the SPAC and this evaluation should be conducted at its inception and throughout its existence. In particular, the Guidance clarified that the specific duration period of a SPAC is not the sole determinant, but among one of the long-standing factors, i.e., the Tonopah factors, to consider when analyzing a SPAC’s investment company status. Under such factors, the following generally must be reviewed: (1) the nature of SPAC assets and income, (2) the activities of a SPAC’s officers, directors and employees, (3) the duration of the SPAC, including with respect to the timing of a business combination, (4) the manner in which a SPAC holds itself out to investors, and (5) its historical development.

Despite the SPAC Final Rules and the Guidance therein, there remains uncertainty concerning the applicability of the Investment Company Act to SPACs, generally, and to us, specifically. This uncertainty may subject us to a claim that we have been operating as an unregistered investment company. This risk may be increased by the amount of time that we held the funds in the trust account in short-term U.S. government treasury obligations or in money market funds invested exclusively in such securities, rather than in cash or in an interest-bearing demand deposit account at a bank. Likewise, the risk may be increased the longer that our initial business combination timeline extends beyond, inclusive of the completion time for a de-SPAC transaction, the date of our initial public offering.

Based on the factors described in the Guidance provided under the SPAC Final Rules, we do not believe that our principal activities currently subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with, and regulation under, the Investment Company Act, it would be subject to additional regulatory burdens and expenses for which we have not allotted funds. For example, our activities would be severely restricted: including: (1) restrictions on the nature of our investments; and (2) restrictions on the issuance of securities, each of which may make it difficult for us to complete our initial business combination. In addition, we would be subject to burdensome compliance requirements, such as: (a) registration as an investment company with the SEC; (b) adoption of a specific form of corporate structure; and (c) reporting, recordkeeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to. As a result, we may be forced to abandon our efforts to complete an initial business combination and to instead liquidate. If we liquidate, our shareholders would not be able to realize the benefits of owning stock in a successor operating business, including the potential appreciation in the value of the successor entity’s stock and warrants following such a transaction, and our warrants would expire worthless.

If our facts and circumstances change over time, we will update our disclosures to reflect how those changes impact the risk that we may be considered to be operating as an unregistered investment company.

We have instructed the trustee to liquidate the securities held in the trust account and instead to hold the funds in the trust account in an interest-bearing demand deposit account in order to seek to mitigate the risk that we could be deemed to be an investment company for purposes of the Investment Company Act. As such, we may receive less interest on the funds held in the trust account, which may reduce the dollar amount the Moringa public shareholders will receive upon any redemption or liquidation of Moringa.

Until July 2024, the funds in the trust account had, since the IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. To mitigate the risk of our being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, we instructed the trustee with respect to the trust account to liquidate the U.S. government treasury obligations or money market funds held in the trust account and thereafter to hold all funds in the trust account in an interest-bearing demand deposit account at a bank until the earlier of consummation of an initial business combination or liquidation of Moringa. Following such liquidation of the securities held in the trust account, we may receive less interest on the funds held in the trust account than the interest we would have received pursuant to the original trust account investments. However, interest previously earned on the funds held in the trust account still may be released to us to pay our taxes, if any. As a result, the dollar amount the public shareholders would receive upon any redemption or liquidation of Moringa may be less than it would have been had the funds remained invested.

We and Silexion may not be able to adequately address these additional risks. Our operations prior to, or New Pubco’s operations following, the Silexion Business Combination might suffer, which may adversely impact our business, financial condition and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On February 16, 2021, the Registration Statement on Form S-1 (File No. 333-252615) relating to our IPO was declared effective by the SEC. For a description of the use of the proceeds generated in our IPO, see Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Liquidity and Capital Resources” of this Form 10-Q. The use of net proceeds from our IPO described herein does not reflect a material change in the expected use of such proceeds as described in our final prospectus for the IPO.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

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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