UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
ACT OF 1934
For the quarter ended
ACT OF 1934
For the transition period from to
Commission file number:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of August 14, 2023, there were
OSIRIS ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
OSIRIS ACQUISITION CORP.
BALANCE SHEETS
(UNAUDITED)
| June 30, |
| December 31, | |||
2023 | 2022 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash | $ | | $ | | ||
Cash – restricted | — | | ||||
Prepaid expenses |
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Due from Sponsor | | | ||||
Total current assets | | | ||||
Cash held in Trust Account | | | ||||
Total assets | $ | | $ | | ||
LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: | ||||||
Accounts payable and accrued expenses | $ | | $ | | ||
Accrued offering costs | | | ||||
Note payable – Sponsor | | | ||||
Total current liabilities | | | ||||
Deferred underwriting compensation | | | ||||
Forward purchase liability | | | ||||
Derivative warrant liabilities |
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Total liabilities |
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Commitments and contingencies |
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Class A common stock subject to possible redemption ( | | | ||||
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Stockholders’ deficit: |
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Preferred shares, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities, common stock subject to possible redemption and stockholders’ deficit | $ | | $ | |
See accompanying notes to these unaudited condensed financial statements.
1
OSIRIS ACQUISITION CORP.
STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended | For the Six Months Ended | ||||||||||
June 30, | June 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
EXPENSES | ||||||||||||
Administrative fee - related party | $ | | $ | | $ | | $ | | ||||
General and administrative | | | | | ||||||||
TOTAL EXPENSES | | | | | ||||||||
OTHER INCOME (EXPENSES) |
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Interest earned on cash held in Trust Account | | | | | ||||||||
Change in fair value of derivative warrant liabilities and forward purchase liability | ( | | ( | | ||||||||
TOTAL OTHER INCOME (EXPENSES) - NET | ( | | ( | | ||||||||
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INCOME (LOSS) BEFORE INCOME TAXES | ( | ( | ( | | ||||||||
Income tax provision | ( | — | ( | — | ||||||||
Net income (loss) | $ | ( | $ | ( | $ | ( | $ | | ||||
Weighted average number of shares of Class A common stock outstanding, basic and diluted |
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Basic and diluted net income (loss) per share of Class A common stock | $ | ( | $ | ( | $ | ( | $ | | ||||
Weighted average number of shares of Class B common stock outstanding, basic and diluted |
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Basic and diluted net income (loss) per share of Class B common stock | $ | ( | $ | ( | $ | ( | $ | |
See accompanying notes to these unaudited condensed financial statements.
2
OSIRIS ACQUISITION CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(UNAUDITED)
For the three months ended June 30, 2023
Class B | Additional | |||||||||||||
Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
| Deficit | |||||
Balance as of March 31, 2023 | | $ | | $ | — | $ | ( | $ | ( | |||||
Accretion of Class A common stock to redemption value | — | — | — | ( | ( | |||||||||
Net loss | — |
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Balance as of June 30, 2023 (unaudited) | | $ | | $ | — | $ | ( | $ | ( |
For the three months ended June 30, 2022
Class B | Additional | |||||||||||||
Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||
| Shares |
| Amount |
| Capital |
| Deficit |
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Balance as of March 31, 2022 | | $ | | $ | — | $ | ( | $ | ( | |||||
Accretion of Class A common stock to redemption value | — | — | — | ( | ( | |||||||||
Net loss | — | — | — | ( | ( | |||||||||
Balance as of June 30, 2022 (unaudited) | | $ | | $ | — | $ | ( | $ | ( |
For the Six Months ended June 30, 2023
| Class B |
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Common Stock | Paid-in |
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| Deficit |
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Balance as of January 1, 2023 | | $ | | $ | | $ | ( | $ | ( | |||||
Accretion of Class A common stock to redemption value | — | — | — | ( | ( | |||||||||
Net loss | | | | ( | ( | |||||||||
Balance as of June 30, 2023 (unaudited) | | $ | | $ | | $ | ( | $ | ( |
For the Six Months ended June 30, 2022
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| Additional |
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Common Stock | Paid-in |
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| Capital |
| Deficit |
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Balance as of January 1, 2022 |
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Accretion of Class A common stock to redemption value | — | — | — | ( | ( | |||||||||
Net income |
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Balance as of June 30, 2022 (unaudited) |
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See accompanying notes to these unaudited condensed financial statements.
3
OSIRIS ACQUISITION CORP.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended | ||||||
June 30, | ||||||
| 2023 |
| 2022 | |||
Cash Flows From Operating Activities: | ||||||
Net income (loss) | $ | ( | $ | | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
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Interest earned on Investments held in Trust Account | ( | ( | ||||
Change in fair value of derivative liabilities | | ( | ||||
Change in fair value of forward purchase asset | | ( | ||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses |
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Accrued offering costs | — | | ||||
Accounts payable and accrued expenses |
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Net Cash Used in Operating Activities |
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Cash Flows From Investing Activities: | ||||||
Cash deposited into Trust Account | ( | — | ||||
Cash withdrawn from Trust Account to pay taxes | | — | ||||
Net Cash Used in Investing Activities | ( | — | ||||
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Cash Flows From Financing Activities: |
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Proceeds from Sponsor note payable |
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Repayment of Sponsor note payable |
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Net Cash Provided By Financing Activities |
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Net change in cash |
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Cash and Cash – Restricted at beginning of period |
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Cash and Cash – Restricted at end of period | $ | | $ | |
See accompanying notes to these unaudited condensed financial statements.
4
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Osiris Acquisition Corp. (the “Company”) was incorporated in Delaware on October 22, 2020. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with
As of June 30, 2023, the Company had not commenced any operations. All activity for the period from October 22, 2020 (inception) through June 30, 2023 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, and identifying a target company for a business combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
Sponsor and Initial Public Offering
On May 18, 2021, the Company consummated the Initial Public Offering of
The Company’s sponsor is Osiris Sponsor, LLC., a Delaware limited partnership (the “Sponsor”). The Company intends to finance its Initial Business Combination with proceeds from the $
Trust Account
Following the closing of the Initial Public Offering on May 18, 2021, an amount of $
During the six months ended June 30, 2023, $
The Company has
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no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete an Initial Business Combination within the Combination Period.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating an Initial Business Combination. There is no assurance that the Company will be able to complete an Initial Business Combination successfully. The Company must complete one or more business combinations with one or more operating businesses or assets with a fair market value equal to at least
The Company will provide the holders of the outstanding Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of an Initial Business Combination either (i) in connection with a stockholder meeting called to approve the Initial Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of an Initial Business Combination or conduct a tender offer will be made by the Company. The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $
If the Company seeks stockholder approval of an Initial Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Articles of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to
The Company will not redeem Public Shares in an amount that would cause its net tangible assets to be less than $
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The Sponsor has agreed (a) to waive its redemption rights with respect to the Founder Shares and Public Shares held by it in connection with the completion of an Initial Business Combination, (b) to waive its rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete an Initial Business Combination within
The Company will have to complete an Initial Business Combination within the Combination Period. If the Company has not completed an Initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $
Extension and Redemptions
On December 14, 2022, the Company held a meeting, where its stockholders approved the Extension Amendment Proposal to extend the date by which the company must consummate its initial business combination from May 18, 2023 to May 18, 2024, or such earlier date as determined by the Company’s board of directors.
In connection with the vote to approve the Extension Amendment Proposal, stockholders holding
Following the meeting, on December 14, 2022, the company’s board of directors waived the condition to the Extension Amendment Proposal providing that no more than $
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Going Concern Considerations, Liquidity and Capital Resources
There is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available. However, management may be able to draw down on the Related Party Loans (see Note 5) to address its liquidity needs. As of June 30, 2023, the Company had a working capital deficit of approximately $
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC.
Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed. As such, the information included in these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K including the audited financial statements as of and for the year ended December 31, 2022 filed with the SEC on April 19, 2023, which was amended with the filing of Form 10-K/A filed with the SEC on May 15, 2023, to restate the audited financial statements to correct errors related to Class A common stock subject to possible redemption and stockholders’ deficit. In the opinion of the Company’s management, these condensed financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of June 30, 2023 and its results of operations and cash flows for the three and six months ended June 30, 2023. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023 or any future periods.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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Use of Estimates
The preparation of the unaudited financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed balance sheets.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liability and forward purchase agreement. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did
Cash – Restricted
Cash that is encumbered or otherwise restricted as to its use is included in cash – restricted. As of December 31, 2022 the balance was $
Cash Held in Trust Account
At June 30, 2023 and December 31, 2022, the Company had approximately $
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC 480. Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features 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, common stock is classified as stockholders’ deficit. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2023 and December 31, 2022, Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ deficit section of the Company’s condensed balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit.
At June 30, 2023 and December 31, 2022, the Class A common stock reflected in the balance sheets are reconciled in the following table:
Class A common stock subject to possible redemption, December 31, 2022 |
| $ | |
Change in remeasurement in carrying value to redemption value | | ||
Class A common stock subject to possible redemption, June 30, 2023 | $ | |
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Concentration of Credit Risk
The Company has significant cash balances at financial institutions which throughout the year significantly exceeded the federally insured limit of $250,000. Any loss incurred or lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations and cash flow.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were
Net Income (Loss) per Share of Common Stock
The Company complies with accounting and disclosure requirements of ASC 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares. Net income (loss) per common share, basic and diluted, for each class of Common stock is calculated by dividing the proportionate share of income or loss by the weighted average number of Common stock for that class of stock outstanding since original issuance. This presentation assumes a business combination as the most likely outcome.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. Accretion associated with the redeemable Class A common stock is excluded from earnings per share as the redemption value approximates fair value. Except for the IPO warrants and private placement warrants above, as of June 30, 2023 and 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company.
The following table reflects the calculation of basic diluted net income per common stock (in dollars, except per share amounts):
Three Months Ended | Three Months Ended | |||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||
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Basic and diluted net loss per share of common stock Numerator: |
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Allocation of net loss | $ | ( | $ | ( | ( | $ | ( | |||||
Denominator: Basic and diluted weighted average shares outstanding |
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Basic and diluted net loss per share of common stock | $ | ( | $ | ( | ( | $ | ( |
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Six Months Ended | Six Months Ended | |||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||
| Class A |
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Basic and diluted net income (loss) per share of common stock Numerator: |
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Allocation of net income (loss) | $ | ( | $ | ( | | $ | | |||||
Denominator: Basic and diluted weighted average shares outstanding |
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Basic and diluted net income (loss) per share of common stock | $ | ( | $ | ( | | $ | |
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. The Public Warrants, the Private Placement Warrants and the Forward Purchase Agreement do not meet the criteria for equity treatment and must be recorded as a liability. The Company’s derivative instruments are recorded at fair value as of the Initial Public Offering (May 18, 2021) and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants and the Forward Purchase Agreement are derivative instruments. As the Warrants and the Forward Purchase Agreement meet the definition of a derivative, the Warrants and the Forward Purchase Agreement are measured at fair value at issuance and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the statement of operations in the period of change.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy (the “Fair Value Hierarchy”), which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
As of June 30, 2023 and December 31, 2022, the carrying values of cash, prepaid expenses, accounts payable and accrued offering costs, advances from related parties and notes payable approximate their fair values primarily due to the short-term nature of the instruments. See Note 10 for discussion of the fair value of the forward purchase asset and derivative warrant liabilities.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
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NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the Company sold
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an aggregate of
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete an Initial Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will be worthless.
The Sponsor and the Company’s officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Shares until
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On December 5, 2020, the Sponsor purchased
The Sponsor has agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A)
Administrative Services Agreement
The Company entered into an agreement, commencing on the effective date of the Initial Public Offering, to pay an affiliate of the Sponsor a total of $
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incurred $
Advances from Related Party
During the year ended December 31, 2021, the Company paid an affiliate of the Sponsor for certain operating costs totaling $
Related Party Loans
On December 5, 2020, the Sponsor issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $
In order to finance transaction costs in connection with an Initial Business Combination, the Company’s Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of an Initial Business Combination, without interest, or, at the lender’s discretion, up to $
On April 12, 2022, the Sponsor agreed to loan the Company an aggregate of up to $
NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic and the conflict in Ukraine and the surrounding region, and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Inflation Reduction Act of 2022
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes
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of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and inhibit the Company’s ability to complete a Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion into shares of Class A common stock). The holders of these securities are entitled to make up to
Underwriting Agreement
The Company granted the underwriters a
The underwriters were paid a cash underwriting discount of $
Forward Purchase Agreement
The Company entered into a forward purchase agreement (a “Forward Purchase Agreement”) with its Sponsor, which provides for the purchase of up to $
The forward purchase warrants have the same terms as the Private Placement Warrants so long as they are held by the Sponsor or its permitted transferees, and the forward purchase shares is identical to the shares of Class A common stock included in the Units being sold in the Initial Public Offering, except the forward purchase shares are subject to transfer restrictions and certain
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registration rights. Any forward purchase warrant held by holders other than the Sponsor or its permitted transferees have the same terms as the warrants included in the Units being sold in the Initial Public Offering.
The Sponsor’s commitment to purchase securities pursuant to the forward purchase agreement is intended to provide the Company with a minimum funding level for an Initial Business Combination. The proceeds from the sale of the forward purchase securities may be used as part of the consideration to the sellers in an Initial Business Combination, expenses in connection with an Initial Business Combination or for working capital in the post-transaction company. Subject to the conditions in the forward purchase agreement, the purchase of the forward purchase securities will be a binding obligation of our sponsor, regardless of whether any shares of Class A common stock are redeemed by the public stockholders in connection with an Initial Business Combination.
The Company classifies the Forward Purchase agreement as an asset or liability, in accordance with the guidance contained in ASC 815-40, at its fair value and will allocate a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation. This asset is subject to re-measurement at each balance sheet date. With each such re-measurement, the asset will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the Forward Purchase Agreement will be reclassified as of the date of the event that causes the reclassification.
NOTE 7. STOCKHOLDERS’ DEFICIT
Preferred Stock — The Company is authorized to issue
Class A Common Stock — The Company is authorized to issue
Class B Common Stock — The Company is authorized to issue
Holders of Class B common stock will have the right to elect all of the Company’s directors prior to an Initial Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by law.
The shares of Class B common stock will automatically convert into Class A common stock at the time of an Initial Business Combination on a
NOTE 8. WARRANTS
Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a)
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completion of an Initial Business Combination and (b)
The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until
Redemption of Warrants for Cash. Once the warrants become exercisable, the Company may redeem for cash the outstanding Public Warrants:
● | in whole and not in part; |
● | at a price of $ |
● | upon a minimum of |
● | if, and only if, the closing price of our Class A common stock equals or exceeds $ |
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete an Initial Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Company accounts for the
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liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re- measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the Initial Public Offering. Accordingly, the Company will classify each warrant as a liability at its fair value and the warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation model to value the Public Warrants and a Black-Scholes model to value the Private Placement Warrants. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The following table presents information about the Company’s assets and liabilities that are measured at fair value at June 30, 2023 and December 31, 2022, and indicates the Fair Value Hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
| June 30, |
| December 31, | ||||
Description: | Level | 2023 | 2022 | |||||
Liabilities: |
|
|
|
|
| |||
Warrant liability - Private Placement Warrants |
| 2 | |
| | |||
Warrant liability - Public Warrants | 2 | $ | | $ | | |||
3 | $ | | $ | |
Transfers to/from Levels 1, 2, and 3 are recognized at the end of the reporting period. As of June 30, 2023 and December 31, 2022, the Public Warrants were valued using the publicly available price for the Warrant. Due to low trading activity during the year ended December 31, 2022, the Public Warrants were transferred to Level 2 on the Fair Value Hierarchy from Level 1 where they were classified at December 31, 2021. As of June 30, 2023 the Private Placements Warrants were valued based on the fair value of the Public Warrants. As such, the Private Placement Warrants were transferred to Level 2 on the Fair Value Hierarchy from Level 3 where they were classified at December 31, 2021.
The Public Warrants, Private Placement Warrants and the forward purchase units were accounted for as liabilities in accordance with ASC 815-40 and are presented within liabilities on the balance sheets. The warrant liabilities and the forward purchase units are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of derivative instruments in the statement of operations.
Upon consummation of the Initial Public Offering, the Company used a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants. In order to value the forward purchase asset, the Company used a valuation method which considers the reconstructed unit price (the total fair value of common stock and half the Private Warrant value) and multiple assumptions such as risk-free rate and time to Initial Business Combination. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of
As of June 30, 2023 and December 31, 2022, the Public Warrants were valued using the publicly available price for the Warrant and are classified as Level 2 on the Fair Value Hierarchy. As of June 30, 2023 and December 31, 2022, the Private Placements Warrants were valued based on the fair value of the Public Warrants. As of June 30, 2023 and December 31, 2022 the
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Private Placement Warrants were classified within Level 2 of the Fair Value Hierarchy due to low trading volume at the measurement date due to the use of the fair value of the Public Warrants. As of June 30, 2023 and December 31, 2022, the forward purchase units were valued using a valuation method which considers the reconstructed unit price (the total fair value of common stock and half the Private Warrant value) and multiple assumptions such as risk-free rate and time to Initial Business Combination. As of June 30, 2023 and December 31, 2022, the forward purchase agreement was classified within Level 3 of the Fair Value Hierarchy at the measurement dates due to the use of unobservable inputs.
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended June 30, 2023.
| Fair Value | ||
Measurement | |||
Using Level 3 | |||
Forward purchase liability |
| Inputs Total | |
Balance, December 31, 2022 | $ | | |
Change in fair value of forward purchase asset/liability |
| | |
Balance, June 30, 2023 | $ | |
At June 30, 2023 and December 31, 2022, the fair value of the derivative feature of the warrants was calculated using the following assumptions:
| June 30, 2023 |
| December 31, 2022 |
| |||
Risk-free interest rate | | % | | % | |||
Stock price | $ | | $ | | |||
Expected life of grants | | years | | years | |||
Expected volatility of underlying stock | | % | | % | |||
Dividends | | % | | % |
As of June 30, 2023, the forward purchase liability was $
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events, except as noted below, that would have required adjustment or disclosure in the financial statements.
On July 13, 2023, the Company effected a drawdown of $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Osiris Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Osiris Sponsor, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”), that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of this Quarterly Report and the Risk Factors section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on April 19, 2023 (the “Annual Report”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company formed under the laws of the State of Delaware on October 22, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar Business Combination with one or more businesses. We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities for the three months ended June 30, 2023 were organizational activities and the search for a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held after the Initial Public Offering. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2023, we have net loss of $5,835,717 which is comprised of the change in the fair value of derivative instruments of $5,360,359, operating costs of $750,546 and income taxes of $59,860, partially offset by interest earned on assets held in the Trust Account of $335,048.
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For the three months ended June 30, 2022, we had a net loss of $744,231, which consists of an administrative services fee of $30,000 due to a related party and of operating costs of $1,608,370 offset by interest income on marketable securities held in the Trust Account of $347,699 and a change in fair value of the derivative warrant liabilities of $546,440.
For the six months ended June 30, 2023, we have net loss of $7,502,150 which is comprised of the change in the fair value of derivative instruments of $6,772,215, operating costs of $1,110,126 and income taxes of $74,481, partially offset by interest earned on assets held in the Trust Account of $454,672.
For the six months ended June 30, 2022, we had net income of $5,038,524, which consists of an administrative services fee of $60,000 due to a related party and of operating costs of $1,962,275 offset by interest income on marketable securities held in the Trust Account of $381,309 and a change in fair value of the derivative warrant liabilities of $6,679,490.
Liquidity and Capital Resources
There is no current commitment on the part of any financing source to provide additional capital and no assurances can be provided that such additional capital will ultimately be available. As of June 30, 2023, the Company had a working capital deficit of approximately $3.7 million and cash of approximately $0.1 million. This condition raises substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. There is no assurance that the Company’s plans to raise additional capital (to the extent ultimately necessary) will be successful. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
On May 18, 2021, we consummated the Initial Public Offering of 23,000,000 Units at a price of $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,600,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $6,600,000.
Following the Initial Public Offering and the sale of the Private Placement Warrants, a total of $230,000,000 was placed in the Trust Account and as of June 30, 2023, we had $0.1 million of cash held outside of the Trust Account, after payment of costs related to the Initial Public Offering, and available for working capital purposes. We incurred $13,707,892 in transaction costs, including $4,600,000 of underwriters’ discount paid, $8,050,000 of deferred underwriting commissions and $1,067,892 of other fees.
On December 14, 2022, we held a special meeting of stockholders (“the Meeting”), where our stockholders approved a proposal (the “Extension Amendment Proposal”) to amend the company’s amended and restated certificate of incorporation to extend the date by which the company must consummate its initial business combination from May 18, 2023 to May 18, 2024, or such earlier date as determined by the company’s board of directors (the “Extension”, and such later date, the “Extended Date”).
In connection with the vote to approve the Extension Amendment Proposal, stockholders holding 19,896,459 shares of the company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the company’s trust account. As a result, $199,650,204 (approximately $10.03 per share) was removed from the company’s trust account to pay such holders. 3,103,541 of the public shares issued in our IPO remain outstanding.
Following the Meeting, on December 14, 2022, the company’s board of directors waived the condition to the Extension Amendment Proposal providing that no more than $75 million of redemptions occur.
For the three months ended June 30, 2023, cash used in operating activities was $1,772,864. Interest earned on cash held in the Trust Account of $454,672, the change in fair value of derivative instruments of $6,772,215 and changes in operating assets and liabilities, which provided $6,183,958 of cash from operating activities, contributed to net loss of $7,502,150.
For the six months ended June 30, 2022, cash used in operating activities was $1,658,848. For the six months ended June 30, 2022, net income of $5,038,524 was affected by interest earned on cash held in the Trust Account of $381,309, a gain in fair value of derivative liabilities of $6,679,490, and changes in operating assets and liabilities, which provided $363,427 of cash from operating activities.
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For the six months ended June 30, 2023, cash used in investing activities was $419,615 including cash deposited into Trust Account of $459,710 and cash withdrawn from the Trust Account to pay of $40,095.
For the six months ended June 30, 2023, cash provided by investing activities was $1,000,000 and included $1,000,000 in proceeds from a Sponsor Note.
As of June 30, 2023, we had cash held in the Trust Account of $32,560,152. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our Business Combination. We may withdraw interest to pay franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of June 30, 2023 and December 31, 2022, we had cash of $71,228 and $563,707, respectively, outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the sponsor, an affiliate of the sponsor, or our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants, at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. The terms of such loans by our officers and directors, if any, have not been determined and no written agreements exist with respect to such loans. The loans would be repaid upon consummation of a Business Combination, without interest.
If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2023. 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.
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of the sponsor a monthly fee of $10,000 for office space and administrative support to the company. We began incurring these fees on May 13, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and the company’s liquidation.
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that we do not complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies and estimates:
Class A Common Stock Subject to Possible Redemption
We account for our shares of Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, the Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of our balance sheet.
Net Loss per Share of Common Stock
The Company’s statement of operations includes a presentation of income (loss) per share for common stock subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted, for each class of Common stock is calculated by dividing the proportionate share of income or loss, by the weighted average number of Common stock for that class of stock outstanding since original issuance. This presentation assumes a business combination as the most likely outcome.
The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events. As of June 30, 2023 and December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into shares of common stock and then share in the earnings of the Company.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “ Derivatives and Hedging”. The Company’s derivative instruments are recorded at fair value as of the Initial Public Offering (May 18, 2021) and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The Company has determined the Warrants are a derivative instrument. As the Warrants meet the definition of a derivative the Warrants are measured at fair value at issuance and at each reporting date in accordance with ASC 820, Fair Value Measurement, with changes in fair value recognized in the statement of operations in the period of change.
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Warrant Instruments
The Company accounts for the Public Warrants and the Private Placement Warrants issued in connection with the Initial Public Offering and the Private Placement in accordance with the guidance contained in FASB ASC 815, “ Derivatives and Hedging” whereby under that provision the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at fair value and adjust the instrument to fair value at each reporting period. This liability will be re-measured at each balance sheet date until the Public Warrants and the Private Placement Warrants are exercised or expire, and any change in fair value will be recognized in the Company’s statement of operations. The fair value of the Public Warrants and the Private Placement Warrants will be estimated using an internal valuation model. The Company’s valuation model utilizes inputs and other assumptions and may not be reflective of the price at which they can be settled. Such warrant classification is also subject to re-evaluation at each reporting period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2023, we were not subject to any market or interest rate risk. The net proceeds of our Initial Public Offering, including amounts in the Trust Account, are currently invested in cash.
Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2023, as such term is defined in Rules 13a-15(e) and 15d- 15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that, as of June 30, 2023, the Company’s disclosure controls and procedures were not effective due to the events that led to the Company's delinquent filing for the year ended December 31, 2022 and as relates to the accounting for non-recurring transactions, specifically, the calculation of Class A common stock subject to possible redemption, which also impacted stockholders’ deficit, that led to the restatement of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which are material weaknesses.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management has undertaken remediation steps to address the material weaknesses, including increasing its management review processes. This remediation is an ongoing process and there can be no assurance that it will effectively address the material weaknesses.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2023 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Company’s Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
We have not sold any equity securities during the quarter ended June 30, 2023.
Use of Proceeds
On May 18, 2021, we consummated the initial public offering of 23,000,000 Units, each comprising of one share of Class A common stock, $0.0001 par value per share and one-half of one Public Warrant. The Units sold in the Initial Public Offering were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $230,000,000. Jefferies LLC and B. Riley Securities, Inc. acted as co-bookrunners of the offering. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-254997). The registration statement was declared effective on May 13, 2021.
We paid a total of $4,600,000 in underwriting discounts and commissions and approximately $1,000,000 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer up to $8,050,000 in underwriting discounts and commissions.
Of the gross proceeds received from the Initial Public Offering, $225,400,000 was placed in the Trust Account established in connection with the Initial Public Offering.
On December 14, 2022, we held a special meeting of stockholders (the “Meeting”), where our stockholders approved a proposal (the “Extension Amendment Proposal”) to amend the company’s amended and restated certificate of incorporation to extend the date by which the company must consummate its initial business combination from May 18, 2023 to May 18, 2024, or such earlier date as determined by the company’s board of directors (the “Extension”, and such later date, the “Extended Date”).
In connection with the vote to approve the Extension Amendment Proposal, stockholders holding 19,896,459 shares of the company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the company’s trust account. As a result, $199,650,204 (approximately $10.03 per share) was removed from the company’s trust account to pay such holders. 3,103,541 of the public shares issued in our IPO remain outstanding.
There has been no material change in the planned use of proceeds from the Initial Public Offering as described in our final prospectus dated May 13, 2021, which was filed with the SEC.
For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Quarterly Report.
Purchases of Equity Securities
We did not repurchase any shares of our equity securities during the quarter ended June 30, 2023.
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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.
No. |
| Description of Exhibit |
3.1 | Second Amended and Restated Certificate of Incorporation of Osiris Acquisition Corp.(1) | |
3.2 | Amendment, dated December 15, 2022, to Second Amended and Restated Certificate of Incorporation (3). | |
3.3 | ||
4.1 | ||
4.2 | ||
4.3 | ||
10.1 | Amendment No. 1, dated April 24, 2023, to Promissory Note.(4) | |
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Labels Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline Extensible Business Reporting Language (included with Exhibit 101). |
* | Filed herewith. |
(1) | Previously filed as an exhibit to our Current Report on Form 8-K filed on May 18, 2021 and incorporated by reference herein. |
(2) | Previously filed as an exhibit to our Registration Statement on Form S-1 filed on April 2, 2021 and incorporated by reference herein. |
(3) | Previously filed as an exhibit to our Current Report on Form 8-K filed on December 15, 2022 and incorporated by reference herein. |
(4) | Previously filed as an exhibit to our Current Report on Form 8-K filed on April 24, 2023 and incorporated by reference herein. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OSIRIS ACQUISITION CORP. | ||
Date: August 14, 2023 | By: | /s/ Benjamin E. Black |
Name: | Benjamin E. Black | |
Title: | Chief Executive Officer (Principal Executive Officer) | |
Date: August 14, 2023 | By: | /s/ Brad Bisca |
Name: | Brad Bisca | |
Title: | Chief Financial Officer (Principal Financial Officer) |
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