UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2023
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices)
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(Zip Code)
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(212 ) 235-0292
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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*Delisted pursuant to the Form 25 filed by The New York Stock Exchange on November 3, 2023.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒
No ☐
As of November 2, 2023, immediately prior to being merged out of existence, 6,266,645 Class A ordinary shares, par value $0.0001 per share (the “Class A ordinary shares”), and 5,327,203 Class B ordinary shares, par value $0.0001 per share (the “Class B ordinary shares”), were issued and outstanding.
TWIN RIDGE CAPITAL ACQUISITION CORP.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
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Page
No.
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1
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Item 1.
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1
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1
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2
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3
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4
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5
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Item 2.
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23 | ||
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Item 3.
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27 | ||
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Item 4.
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27 | ||
| 28 | |||
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Item 1.
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28 | ||
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Item 1A.
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28
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Item 2.
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28 | ||
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Item 3.
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28 | ||
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Item 4.
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28 | ||
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Item 5.
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28 | ||
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Item 6.
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28 | ||
| 29 | |||
TWIN RIDGE CAPITAL ACQUISITION CORP.
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September 30,
2023 |
December 31,
2022
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Assets
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Cash
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$
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$ | |||||
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Prepaid expenses
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Due from ,
net
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Total current assets
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Marketable securities held in Trust Account
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Total Assets
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$
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$ | |||||
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Liabilities and Shareholders’ Deficit
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Current liabilities:
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Accounts payable
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$ | $ | ||||||
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Due to related party, net
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Promissory note -
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Total current liabilities
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Warrant liability
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Commitment fee shares liability
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Total Liabilities
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Commitments
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Class A ordinary shares subject to possible redemption,
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Shareholders’ Deficit:
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Preference shares, $
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Class A ordinary shares, $
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Class B ordinary shares, $
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Additional paid-in capital
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|||||||
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Accumulated deficit
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(
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)
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( |
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Total Shareholders’ Deficit
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(
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)
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( |
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Total Liabilities and Shareholders’ Deficit
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$
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$ | |||||
The accompanying notes are an integral part of the unaudited condensed financial statements.
TWIN RIDGE CAPITAL ACQUISITION CORP.
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For the Three Months Ended
September 30,
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For the Nine Months Ended
September 30,
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2023
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2022
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2023
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2022
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Formation and operating costs
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$
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$ | $ |
$
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||||||||||
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Loss from operations
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(
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)
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( |
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(
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)
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Other income:
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||||||||||||||||
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Change in fair value of commitment fee shares
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( |
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Change in fair value of warrant liabilities
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(
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( |
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Trust interest income
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Total other income, net
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Net (loss) income
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$
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(
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)
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$ | $ | ( |
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$
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Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption
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Basic and diluted net (loss) income per share
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$
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(
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)
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$ | $ | ( |
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$
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Basic and diluted weighted average shares outstanding, ordinary shares
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Basic and diluted net (loss) income per share
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$
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(
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)
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$ | $ | ( |
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$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
TWIN RIDGE
CAPITAL ACQUISITION CORP.
FOR THE THREE
AND NINE MONTHS ENDED SEPTEMBER 30, 2023
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Class A
Ordinary Shares
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Class B
Ordinary Shares
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Shareholders’
Deficit
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||||||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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Balance – December 31, 2022
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$
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$
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$
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$
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(
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)
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$
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(
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||||||||||||||
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Remeasurement of Class A ordinary shares to redemption value
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—
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—
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(
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(
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Net loss
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—
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—
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(
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(
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Balance – March 31, 2023
(Unaudited)
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(
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(
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Remeasurement of Class A ordinary shares to redemption value
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— | — | ( |
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| Net income |
— | — | ||||||||||||||||||||||||||
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Balance – June 30, 2023 (Unaudited)
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( |
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Remeasurement of Class A ordinary shares to redemption value
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— | — | ( |
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| Net loss | — | — | ( |
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| Balance – September 30, 2023 (Unaudited) |
$ |
$ | $ | $ | ( |
) | $ | ( |
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FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022
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Class A
Ordinary Shares
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Class B
Ordinary Shares
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Shareholders’
Deficit
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Shares
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Amount
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Shares
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Amount
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Balance – December 31, 2021
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$
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$
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$
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$
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(
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)
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$
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(
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)
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Remeasurement of
Class A ordinary shares to redemption value
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— | — | ( |
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Net income
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—
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—
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Balance – March 31, 2022
(Unaudited)
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(
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)
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(
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)
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Remeasurement of
Class A ordinary shares to redemption value
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— | — | ( |
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Net income
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— | — | ||||||||||||||||||||||||||
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Balance – June 30, 2022 (Unaudited)
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( |
) | ( |
) | ||||||||||||||||||||||||
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Remeasurement of
Class A ordinary shares to redemption value
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— | — | ( |
) | ( |
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Net income
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— | — | ||||||||||||||||||||||||||
| Balance – September 30, 2022 (Unaudited) |
$ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||
The accompanying
notes are an integral part of the unaudited condensed financial statements.
TWIN RIDGE CAPITAL ACQUISITION CORP.
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For the Nine Months Ended
September 30,
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2023
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2022
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Cash Flows from Operating Activities:
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Net (loss) income
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$ | ( |
) |
$
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Adjustments to reconcile net (loss) income to net cash used in operating activities:
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Trust interest income
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( |
) | ( |
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Change in fair value of warrant liabilities
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(
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)
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Change in fair value of commitment fee shares
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Changes in current assets and liabilities:
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Prepaid expenses
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Accounts payable
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(
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Due from related party
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( |
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Due to related party
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(
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Net cash used in operating activities
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( |
) |
(
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Cash Flows from Investing Activities:
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| Principal deposited into Trust Account |
( |
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Cash withdrawn from trust in connection with redemption
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Net cash provided by investing activities
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Cash Flows from Financing Activities:
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Redemption of Class A Shares
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( |
) |
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Proceeds from issuance of promissory note to related party
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Net cash used in financing activities
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( |
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Net Change in Cash
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( |
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(
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Cash – Beginning
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Cash – Ending
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$ |
$
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Non-Cash Investing and Financing Activities:
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Remeasurement of Class A ordinary shares subject to possible redemption
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$ |
$
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The accompanying notes are an integral part of the unaudited condensed financial statements.
| NOTE 1. |
ORGANIZATION AND BUSINESS OPERATIONS
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Organization and General
Twin Ridge Capital Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on January 7,
2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (an “Initial
Business Combination”). The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company. The Company is an early stage and emerging growth company and, as such, the Company is
subject to all of the risks associated with early stage and emerging growth companies.
The Company has selected December 31 as its
fiscal year end.
As of September 30, 2023, the Company had not
commenced any operations. All activity for the period from January 7, 2021 (inception) through September 30, 2023 relates to the Company’s formation and our initial public offering (“IPO”) described below, and, since the closing of the IPO on March
8, 2021, the search for a prospective Initial Business Combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income
in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liabilities and other financial instruments as other income (expense).
The Company’s sponsor is Twin Ridge Capital
Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).
Business
Combination
On November 3, 2023 (the “Closing Date”), the
Company, Carbon Revolution Public Limited Company (formerly known as Poppetell Limited), a public limited company incorporated in Ireland with registered number 607450 (“MergeCo”), Carbon Revolution Limited, an Australian public company with
Australian Company Number (ACN) 128 274 653 listed on the Australian Securities Exchange (“Carbon Revolution”) and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of MergerCo (“MergerSub” and, together with the
Company, MergeCo and Carbon Revolution, the “Parties”), consummated the business combination pursuant to the terms of a Business Combination Agreement (defined below), dated November 29, 2022, as amended or supplemented from time to time, pursuant to
which, among other things, the Company merged with and into MergerSub, with MergerSub surviving as a wholly-owned subsidiary of MergeCo, with shareholders of the Company receiving Carbon Revolution Ordinary Shares (defined below), in exchange for
their existing ordinary shares of the Company and existing warrant holders of the Company having their warrants automatically exchanged by assumption by MergeCo of the obligations under such warrants, including to become exercisable for of a Carbon Revolution Ordinary Share instead of ordinary share of the Company, in proportion to the exchange ratio of one Carbon Revolution Ordinary Share for every ten ordinary shares of the Company (the “Business Combination”). In addition, the Company, Carbon
Revolution and MergeCo implemented a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) in accordance with the Scheme Implementation Deed, dated as of
November 30, 2022 as amended or supplemented from time to time (the “Scheme Implementation Deed”), which resulted in all shares of Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing one share to the MergeCo (resulting in Carbon Revolution becoming a wholly-owned subsidiary of MergeCo) and MergeCo issuing Carbon Revolution Ordinary
Shares to the shareholders of Carbon Revolution. The MergeCo had no operations prior to entering into the Scheme Implementation Deed and Business Combination Agreement. The MergeCo’s sole purpose was to become a holding company following the Business
Combination. Upon the closing of the Business Combination, MergeCo became the direct parent of Carbon Revolution. MergeCo’s ordinary shares, par value $0.0001
(“Carbon Revolution Ordinary Shares”) and the warrants to acquire of a Carbon Revolution Ordinary Share at an exercise price of
$11.50 per of a
Carbon Revolution Ordinary Share ($115.00 per whole Carbon Revolution Ordinary Share) (“Carbon Revolution Public Warrants”) are trading on
the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “CREV” and“CREVW”, respectively. The Carbon Revolution Public Warrants may only be exercised for a whole number of ordinary shares.
Business prior to the
Business Combination
Except as
the context otherwise requires, the following description relates to periods prior to the consummation of the Business Combination, which occurred on November 3, subsequent to the end of the period covered by this Quarterly Report on Form 10-Q.
Financing
The registration statement for the Company’s
IPO was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the IPO of 20,000,000 units (the “Units” and, with
respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of
$200,000,000 , which is discussed in Note 3.
Simultaneously with the closing of the IPO,
the Company consummated the sale of 4,933,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $7,400,000 , which is discussed in Note 4.
Transaction costs amounted to $11,551,318 consisting of $4,000,000 of
underwriting discount, $7,000,000 of deferred underwriting discount, and $551,318 of other offering costs.
The Company granted the underwriters in the
IPO a 45-day option to purchase up to 3,000,000
additional Units to cover over-allotments, if any. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813
Units, generating an aggregate of gross proceeds of $13,088,130 , and incurred $261,764 in cash underwriting fees and $458,085 in deferred underwriting fees.
Trust Account
Following the closing of the IPO on March 8,
2021 and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and
the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), which can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”) which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust
Account that may be released to the Company to pay its taxes, if any, the Company’s amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, provide that the proceeds from
the IPO and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the Company’s public shareholders,
until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the
redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide
holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100 %
of the Company’s public shares if the Company does not complete its Initial Business Combination within 24 months from the closing of the
IPO ( the “Combination Period” ) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the Company’s public shares if the Company has not consummated its Business
Combination within the Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds
from the Trust Account upon the subsequent completion of an Initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination Period, with respect to such Class A ordinary shares so
redeemed. Following the Extension Meeting (as defined below), the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. The funds in the Trust Account will be maintained in cash in an
interest-bearing deposit account until the earlier of the Company’s Initial Business Combination or its liquidation. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have
priority over the claims of the public shareholders.
Initial Business Combination
The Company must complete one or more Initial Business Combinations having an aggregate fair market value of at least 80 % of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a
definitive agreement in connection with the Initial Business Combination. However, the Company will complete the Initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or
acquire 50 % or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target
sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.
The ordinary shares subject to redemption are
recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from
Equity” (“ASC 480”).
If the Company has not consummated 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 business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on
the funds held in the Trust Account and not previously released to the Company to pay its taxes, if any (less up to $100,000 of interest to
pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any);
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors (the “Board”), liquidate and dissolve, subject in the case of clauses (ii)
and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
The Sponsor, officers and directors have
agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined below and described in Note 5), (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder
vote to approve an amendment to the Company’s amended and restated memorandum and articles of association, (iii) waive their rights to liquidating distributions from the Trust Account with respect any Founder Shares they hold if the Company fails to
consummate an Initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its Initial
Business Combination within the Combination Period), and (iv) vote their Founder Shares and public shares in favor of the Initial Business Combination.
The Sponsor has agreed that it will 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 (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company
has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public
share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00
per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s tax obligations, provided that such liability will not apply to any claims by a third party or prospective
target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy
its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or
directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
The Company consummated its initial Business Combination on November 3, 2023.
Business Combination Agreement and Scheme Implementation Deed
On November 29, 2022, the Parties entered
into a Business Combination Agreement, and on November 30, 2022, Carbon Revolution, the Company and MergeCo entered into a Scheme Implementation Deed.
Under the Scheme Implementation Deed, Carbon
Revolution proposed a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (the “Corporations Act”) subject to any alterations or conditions made or required by the Federal Court of Australia or such other court of competent
jurisdiction under the Corporations Act agreed to in writing by the Company and Carbon Revolution under subsection 411(6) of the Corporations Act and agreed to in writing by Carbon Revolution, the Company and MergeCo (the “Scheme”) and a capital
reduction under Part 2J.1 of the Corporations Act 2001 (Cth) which, if implemented, will result in all shares of Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing a share to MergeCo (resulting in Carbon
Revolution becoming a wholly-owned subsidiary of MergeCo) and MergeCo issuing shares to the shareholders of Carbon Revolution, subject to approval from Carbon Revolution’s shareholders, approval of the Federal Court of Australia and the satisfaction
of various other conditions (a full list of the conditions is set out in the Scheme Implementation Deed).
The Business Combination Agreement provides for the Business Combination, pursuant to
which, among other things, the Company shall be merged with and into MergerSub, with Merger Sub surviving as a wholly-owned subsidiary of MergeCo (the “Merger”), subject to, among other things, the approval of the Company’s shareholders.
The transactions contemplated by the Business
Combination Agreement and the Scheme Implementation Deed (the “Transactions”) were consummated subject to the deliverables and provisions as further described in the Business Combination Agreement.
Upon implementation of the Scheme, the Carbon Revolution non-executive directors were appointed to MergeCo’s board of directors (Jake Dingle is
already on MergeCo’s board of directors), as were four additional independent non-executive directors identified by Carbon Revolution’s board of directors and the Company who will bring significant additional expertise to MergeCo’s board of
directors. The Company agreed not to exercise its right to appoint two additional directors under the Scheme Implementation Deed on the basis that offers were made to each of these additional independent non-executive directors and any two of these
four additional independent non-executive directors agreed to join MergeCo’s board of directors. Ronan Donohoe and Rolando Ebuna resigned upon implementation of the Scheme.
Amendment to Scheme and Amendment to Business Combination Agreement
On September 21, 2023, the parties agreed to amend the Scheme attached to the Scheme Implementation Deed and on October 4, 2023, the parties agreed to further revise the Scheme attached to the Scheme Implementation Deed and the Business Combination Agreement (the “Amendments”). Under the terms of the Amendments taken together, the parties agreed to revise the merger ratios from
The merger ratios were agreed to be amended on October 5, 2023 subject to the order of the Federal Court of Australia to reduce the total number
of MergeCo Ordinary Shares to be issued in the Business Combination (as defined below) on a one share per ten share basis, affecting all
recipients of MergeCo Ordinary Shares equally. Accordingly, the relative share ownership of holders of Twin Ridge Class A Ordinary Shares who do not redeem, holders of Carbon Revolution ordinary shares, holders of Carbon Revolution performance
rights and Yorkville Advisors Global, LP, as well as the percentage of shares issuable pursuant to the FY2023 Incentive Equity Plan or upon exercise of any warrants, shall be unaffected by the adjustment of the merger ratios, except for minor
adjustments due to the treatment of fractional shares. Such adjustment is intended to result in a higher trading price for MergeCo Ordinary Shares without altering any of the economic terms of the Business Combination.
Related Agreements
Letter Agreement
On June 12, 2023, the Company, Carbon Revolution, MergeCo and Merger Sub entered into a letter agreement (the “Letter Agreement”), pursuant to which Carbon Revolution agreed to be responsible for reasonable costs, fees, disbursements and other expenses incurred by or on behalf of the Company in
the ordinary course of business, including costs, fees, disbursements and expenses relating to performing under, complying with and consummating the Transactions (as defined in the Business Combination Agreement) from the time the Company no longer
has sufficient funds to satisfy such expenses until the closing of the Business Combination with Carbon Revolution. Additionally, the Letter Agreement extended the End Date (as defined in the Scheme Implementation Deed) to October 31, 2023.
Sponsor Side Letter
Concurrently with the execution of the
Business Combination Agreement and the Scheme Implementation Deed, the Sponsor, Twin Ridge Capital Sponsor Subsidiary Holdings LLC (“TRCA Subsidiary”), Alison Burns (“Burns”), Paul Henrys (“Henrys”) and Gary Pilnick (“Pilnick” together with Burns and
Henrys, the “Independent Directors”) and Dale Morrison (“Morrison”), Sanjay K. Morey (“Morey”) and William P. Russell, Jr. (“Russell”, and together with Morrison and Morey, the “Other Insiders”, and together with Sponsor, TRCA Subsidiary and the
Independent Directors, the “Sponsor Parties”), the Company, Carbon Revolution and MergeCo entered into a Sponsor Side Letter (the “Sponsor Side Letter”), pursuant to which the Sponsor Parties have agreed to take, or not take, certain actions during
the period between the execution of the Sponsor Side Letter and the consummation of the Merger, including, (i) to vote any ordinary shares of the Company owned by such Sponsor Party (all such shares, the “Covered Shares”) in favor of the Merger and
the Scheme and other related proposals at the shareholders’ meeting of the Company, and any other special meeting of the Company’s shareholders called for the purpose of soliciting stockholder approval in connection with the consummation of the
Merger and the Scheme, (ii) to waive the anti-dilution rights or similar protections with respect to the Class B ordinary shares owned by such party as set forth in the governing documents of the Company, or otherwise, and (iii) not to redeem any
Covered Shares (as defined in the Sponsor Side Letter) owned by such Sponsor Party.
Pursuant to the Sponsor Side Letter, Sponsor
has also agreed that, immediately prior to the consummation of the Merger, and conditioned upon the consummation of the Merger, 327,203 of
the 5,267,203 Class B ordinary shares beneficially owned by Sponsor shall be automatically forfeited and surrendered to the Company for no
additional consideration.
Standby
Equity Purchase Agreement
Concurrently with the parties entering into the Business Combination Agreement and
Scheme Implementation Deed, the Company entered into a Standby Equity Purchase Agreement (the “CEF”) with YA II PN, Ltd. (“Yorkville”) pursuant to which, subject to the consummation of the Transactions, MergeCo has the option, but not the
obligation, to issue, and Yorkville shall subscribe for, an aggregate amount of up to $60 million of ordinary shares of MergeCo (“MergeCo
Ordinary Shares”) at the time of MergeCo’s choosing during the term of the agreement, subject to certain limitations, including caps on exchanges, issuances and subscriptions based on trading volumes. Each advance under the CEF (an “Advance”) may
be in an amount of MergeCo Ordinary Shares up to the greater of $10 million or the aggregate daily trading volume of MergeCo Ordinary
Shares in the trading days prior to MergeCo requesting an Advance. The purchase price for an Advance is determined at the option of
MergeCo and is either (a) 95 % of the average daily VWAP (as defined below) during the applicable one-day pricing period or (b) 97 % of the
lowest daily VWAP during the applicable consecutive trading day pricing period. “VWAP” means, for any trading day, the daily
volume weighted average price of MergeCo Ordinary Shares for such date on the securities listing exchange that the MergeCo Ordinary Shares are trading as of such date during regular trading hours as reported by Bloomberg L.P. The CEF will continue
for a term of three years commencing from the sixth trading day following the closing of the Business Combination, unless prior
terminated pursuant to its terms.
Extension Meeting
On March 6, 2023, the Company held an extraordinary general meeting of shareholders
(the “Extension Meeting”) to amend its amended and restated memorandum and articles of association to extend the date by which it has to consummate an initial Business Combination to March 8, 2024, as applicable under the Amended and Restated
Articles of Association. Carbon Revolution or the Sponsor (or one or more of their affiliates, members or third-party designees) will deposit $160,000
into the Trust Account for each such monthly extension, for an aggregate deposit of up to $1,440,000 (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by the Company to Carbon
Revolution. As of September 30, 2023, $1,120,000 has been deposited into the Trust Account. As of the issuance date of these
financial statements, an aggregate amount of $1,280,000 has been deposited into the Trust Account.
On March 10, 2023, the Company issued an
unsecured promissory note in the total principal amount of up to $1,500,000 (the “Promissory Note”) to Carbon Revolution. The Promissory
Note does not bear interest and matures upon closing of the Company’s initial Business Combination. In the event that the Company does not consummate a Business Combination, the Promissory Note will be repaid only from amounts remaining outside of
the Trust Account, if any. The proceeds of the Promissory Note will be deposited in the Trust Account. As of September 30, 2023, there was $1,120,000
outstanding under the Promissory Note. Subsequent to the nine-month period ended September 30, 2023 and as of the issuance date of these financial statements, the Company has drawn an additional $160,000 under the Promissory Note for monthly extension through November 8,
2023.
In connection with that vote, the holders of
15,042,168 Class A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount
of approximately $153,567,547 or approximately $10.21 per share. After the satisfaction of such redemptions and receipt of the initial deposit of $480,000
to the Trust Account, the balance in the Trust Account was approximately $64,457,034 .
Certain purported shareholders of the Company
sent demand letters (the “Demands”) alleging deficiencies and/or omissions in the Registration Statement on Form F-4, filed by Carbon Revolution with the U.S. Securities and Exchange Commission (the “SEC”) initially on February 27, 2023 (as may be
further amended). The Demands seek additional disclosures to remedy these purported deficiencies. The Company believes that the allegations in the Demands are meritless.
General Meeting
On October 12, 2023, the Company held an
extraordinary general meeting of its shareholders (the “General Meeting”), at which holders of 10,445,986 ordinary shares held of record
as of August 25, 2023, the record date for the General Meeting (the “Record Date”), were present in person or by proxy, representing approximately 90.09 %
of the voting power of Twin Ridge’s ordinary shares as of the Record Date, and constituting a quorum for the transaction of business. The proposals listed below are defined and described in greater detail in Twin Ridge’s definitive proxy statement,
which was filed with the SEC on September 11, 2023, as supplemented by the additional definitive proxy materials filed on September 25, 2023 and October 5, 2023. The shareholders approved the Business Combination Proposal, the Merger Proposal, and
the Equity Incentive Proposal.
In connection with the General Meeting and
the Business Combination, the holders of 6,201,815 of Twin Ridge’s outstanding Class A ordinary shares, par value $0.0001 per share exercised their right to redeem their shares for cash at a redemption price of approximately $10.77 per share, for an aggregate redemption amount of approximately $66,773,355 .
Going Concern and Liquidity
As of September 30, 2023, the Company had
approximately $51 ,000 in its operating bank account and working capital deficit of approximately $10.0 million.
Until the consummation of an Initial Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating, and consummating the Initial Business Combination.
The Company may need to raise further
additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time
or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional
capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The
Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
The Company had until March 8, 2024, as
applicable under the Amended and Restated Articles of Association to consummate an Initial Business Combination. The Company’s management has determined that the liquidity condition raises substantial doubt about the Company’s ability to continue as
a going concern. No adjustments have been made to the Company’s carrying amounts of assets or liabilities. As noted above, the Company’s Initial Business Combination was consummated on November 3, 2023.
Risks and
Uncertainties
The Company’s results of operations and our ability to complete a Business Combination may be adversely affected by various factors that could cause
economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices,
inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability,
such as the current conflicts in Ukraine and Israel. The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and
our ability to complete a Business Combination.
The Company is exposed to volatility in the banking market. At various times, we could have deposits with certain U.S. banks in excess of the maximum amounts insured by the U.S. Federal Deposit
Insurance Corporation (“FDIC”). On March 10, 2023, Silicon Valley Bank became insolvent. State regulators closed the bank and the FDIC was appointed as its receiver. The Company did not hold any deposits with Silicon Valley Bank as of September
30, 2023 and December 31, 2022. On May 1, 2023, First Republic Bank was
forced to close and JPMorgan Chase Bank assumed all of the deposits and assets of First Republic Bank. The Company held assets in First Republic Bank, however due to FDIC limits had little exposure to losses at September 30, 2023. The Company has
not experienced any losses due to these bank failures.
| NOTE 2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis of Presentation
The accompanying unaudited condensed financial statements are presented in
U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the
information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and
results for the periods presented. Operating results for the three and nine months ended September 30, 2023 is not necessarily indicative of the results that may be expected through December 31, 2023.
The accompanying unaudited condensed financial statements should be read in
conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K/A filed by the Company with the SEC on April 5, 2023 (the “Form 10-K/A”).
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 Securities Exchange Act of 1934 (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.
Use of Estimates
The preparation of the condensed financial statements
in conformity with 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 financial statements
and the reported amounts of revenues and expenses during the reporting periods.
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 financial statement, which management considered in formulating its
estimate, could change in the future. One of the more significant accounting estimates included in these statements are the warrant liabilities and commitment fee shares liability. 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 no
Marketable Securities Held in Trust Account
At September 30, 2023, the investment in the Trust Account was held in a
demand deposit account. At December 31, 2022, the assets held in the Trust Account were held in money market funds. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are
presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest income in the accompanying
statements of operations. The estimated fair value of investments held in Trust Account are determined using available market information.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an
asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier 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.
|
In some circumstances, the inputs used to measure fair value might be
categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value
measurement.
The fair
value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of
cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses, and due to related party are estimated to approximate the carrying values as of September 30, 2023 and December 31, 2022 due to the short maturities of such
instruments.
The fair value of the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active
markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrants is classified as level 3. The fair value of the commitment fee shares is
based on a discounted cash flow model whereby the stock payment was discounted using risk free rates based on an estimated settlement date. The fair value of the commitment fee shares liability is classified as level 3. See Note 6 for
additional information on assets and liabilities measured at fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations
of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At September 30, 2023, and December 31, 2022, the Company has not experienced losses on
this account and management believes the Company is not exposed to significant risks on such account.
Ordinary Shares Subject to Possible Redemption
All of the 21,308,813 Class A ordinary shares
sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the
Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been
codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares has been
classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the
redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
As of September 30, 2023, and December 31,
2022, the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
|
Class A ordinary shares
subject to possible redemption – December 31,
2022
|
$
|
|
||
| Less: |
||||
|
Redemption of Class A Ordinary Shares
|
( |
) | ||
| Plus: | ||||
| Remeasurement of Class A ordinary shares to redemption value | ||||
| Class A ordinary shares subject to possible redemption – September 30, 2023 | $ |
Net (Loss) Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata
between the two classes of shares. The warrants are exercisable to purchase 12,210,780 Class A ordinary shares in the aggregate.
As a result, diluted net (loss) income per ordinary share is the same as basic net (loss) income per ordinary share for the periods. The table below presents a reconciliation of the numerator and denominator used to
compute basic and diluted net (loss) income per share for each class of ordinary shares:
|
For the Three Months Ended
September 30,
|
||||||||||||||||
| 2023 | 2022 |
|||||||||||||||
|
Class A
|
Class B
|
Class A |
Class B |
|||||||||||||
|
Basic and diluted net (loss) income per share:
|
||||||||||||||||
|
Numerator:
|
||||||||||||||||
|
Allocation of net (loss) income
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ | ||||||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average shares outstanding
|
|
|
||||||||||||||
|
Basic and diluted net (loss) income per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ | ||||||||
|
For the Nine Months Ended
September 30,
|
||||||||||||||||
| 2023 | 2022 | |||||||||||||||
|
Class A
|
Class B
|
Class A |
Class B |
|||||||||||||
|
Basic and diluted net (loss) income per share:
|
||||||||||||||||
|
Numerator:
|
||||||||||||||||
|
Allocation of net (loss) income
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ | ||||||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average shares outstanding
|
|
|
||||||||||||||
|
Basic and diluted net (loss) income per share
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | $ | ||||||||
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of the ASC
340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A –- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value
basis compared to total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A ordinary shares are charged to the shareholders’ deficit. The Company incurred offering
costs amounting to $12,271,167 as a result of the IPO consisting of a $4,261,764 underwriting fee, $7,458,085 of deferred
underwriting fees and $551,318 of other offering costs. The Company recorded $11,731,323 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $539,844 of offering costs in connection with our warrants included in the units issued in our initial public offering, each whole warrant being exercisable for one Class A ordinary share at an exercise price of $11.50
per share (the “Public Warrants”) and Private Placement Warrants that were classified as liabilities.
On November 15,
2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result,
the Company recognized $323,385 of other income attributable to the derecognition of deferred underwriting fees allocated to
offering costs and $7,134,700 was recorded to additional paid-in capital in relation to the waiver of the deferred underwriting
discount in the accompanying financial statements (see Note 7).
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments
based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and
whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Class A ordinary shares, among other conditions for equity classification. This assessment, which
requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and
each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statement of operations. The initial fair value of the Private Placement Warrants and Public
Warrants were estimated using a Monte Carlo simulation (see Note 6).
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 815. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting
date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each
reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Standby Equity Purchase Agreement Classification.
The Company accounts for its CEF as either
equity-classified or liability-classified instruments based on an assessment of the agreement’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the CEF is a freestanding financial
instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the CEF meets all of the requirements for equity classification under ASC 815, including whether the CEF is indexed to the Company’s Class A
ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at date of the agreement and as of each subsequent quarterly period end date while the CEF is
outstanding. For an agreement that meets all of the criteria for equity classification, the CEF would be required to be recorded as a component of additional paid-in capital at the time of issuance.
For an agreement that does not meet all the criteria for
equity classification, the CEF would be required to be recorded at its initial fair value on the date of issuance. The fair value of the CEF is remeasured at each balance sheet date with the change in the estimated fair value of the CEF
recognized as a non-cash gain or loss on the statements of operations. The Company has analyzed the CEF (as defined in Note 1) and determined it is considered to be a freestanding instrument and does not exhibit any of the characteristics in
ASC 480 and therefore are not classified as liabilities under ASC 480. Based on the settlement terms of the agreement, the CEF met the requirements for equity classification.
Commitment Fee Shares Liability
In connection
with the CEF, the Company agreed to issue Yorkville 15,000 of the Company’s ordinary shares upon consummation of the initial Business Combination. The Company recorded the fair value of the commitment fee shares liability on the balance
sheets and the related expense on its statements of operations. The initial fair value of the commitment fee shares liability was estimated using a discounted cash flow model (see Note 6).
Income Taxes
The Company accounts for income taxes under FASB ASC Topic 740, “Income
Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax
benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute
for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by
taxing authorities. There were no no no
There is currently no taxation imposed on income by the Government of the
Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.
Recent Accounting Pronouncements
In August 2020,
the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify
accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception
guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s
own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022, and should be applied on a full or
modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 on January 7, 2021 (Inception). The adoption of ASU 2020-06 did not have an impact on the Company’s financial
statements.
In June 2016, the FASB issued ASU 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).
This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including
historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the
effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on
January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.
Management does
not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
| NOTE 3. |
INITIAL PUBLIC OFFERING
|
Pursuant to the IPO on March 8, 2021,
the Company sold 20,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to
adjustment. The warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or
12 months from the closing of the IPO, and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation.
On March 10, 2021, the underwriters
partially exercised the over-allotment option to purchase 1,308,813 Units. The aggregate Public Warrants outstanding pursuant to the IPO and the underwriters
partially exercised the over-allotment option are 7,102,938 .
Following the closing of the IPO on
March 8, 2021 and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was
placed in a Trust Account, which can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only
in direct U.S. government treasury obligations. Following the Extension Meeting, the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. The funds in the Trust Account will be maintained in cash in an
interest-bearing deposit account until the earlier of the Company’s Initial Business Combination or its liquidation.
Public Warrants
Each whole warrant entitles the holder
to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising
purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20
per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any
Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”)), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial
Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20
trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, and the $18.00
per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and
the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the
higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on
the later of one year from the closing of the IPO or 30 days after the completion of its Initial Business Combination and will expire five years
after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as
practicable, but in no event later than 20 business days after the closing of the Initial Business Combination, it will use its
commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its commercially
reasonable efforts to cause the same to become effective within 60 business days after the closing of the Initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the
warrant agreement; provided that, if the Company’s Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section
18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act, and in the event the Company
so elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the Initial Business Combination, warrant holders may, until such
time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the
Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay
the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied
by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361 .
The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10
trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of
warrants when the price per Class A ordinary share equals or exceeds $18.00 .
Once the warrants become exercisable,
the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| ● |
in whole and not in part;
|
| ● |
at a price of $
|
| ● |
upon a minimum of
|
| ● |
if, and only if, the closing
price of the Class A ordinary shares equals or exceeds $
|
Redemption of
warrants when the price per Class A ordinary share equals or exceeds $10.00 .
Once the warrants become exercisable,
the Company may redeem the outstanding warrants:
| ● |
in whole and not in part;
|
| ● |
at $
|
| ● |
if, and only if, the closing
price of the Company’s Class A ordinary shares equals or exceeds $
|
| ● |
if the closing price of the Class A ordinary shares for any
|
| NOTE 4. |
PRIVATE PLACEMENT
|
Simultaneously with the closing of the
IPO, the Sponsor purchased an aggregate of 4,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,400,000 , in a private placement. The proceeds from the Private Placement Warrants were added to the proceeds from the IPO held in the Trust Account.
Pursuant to the underwriters’ partial
exercise of the over-allotment option on March 10, 2021, the Sponsor purchased an additional 174,509 Private Placement Warrants.
The Private Placement Warrants
(including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees,
has the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the
Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the Units being sold in the IPO.
| NOTE 5. |
RELATED PARTY TRANSACTIONS
|
Founder Shares
On January 12, 2021, the Sponsor paid $25,000 , or approximately $0.004 per
share, to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares. Up to 750,000 of the 5,327,203 20,000 three
independent directors. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813
Units. As a result, 422,797 Founder Shares were forfeited on April 19, 2021.
In
February 2021, the Sponsor transferred its interests representing a total of 60,000 Class B ordinary shares of the Company to three independent directors of the Company for per share consideration equal to the amount paid by the Sponsor to the Company for each Founder
Share. Pursuant to the terms of the agreements governing these transfers, if the transferee ceases to serve as a director of the Company prior to the completion of the Company’s Initial Business Combination, the Sponsor has the option to
repurchase the Founder Shares from such transferee for the same per share consideration paid by the transferee for the initial transfer. The Sponsor’s option to repurchase the Founder Shares shall expire upon the consummation of the Company’s
Initial Business Combination. The sale of the Founder Shares to the Company’s directors is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, share-based compensation associated with
equity-classified awards is measured at fair value upon the grant date. The fair value of the shares sold to the Company’s directors was $300,490
or approximately $5.01 per share. The Founder Shares were effectively sold subject to a performance condition (i.e., the occurrence
of an Initial Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence. As of September 30, 2023, the Company determined that a Business Combination
is not considered probable, and, therefore, no share-based compensation expense has been recognized. Share-based compensation
would be recognized at the date an Initial Business Combination is considered probable (i.e., upon consummation of an Initial Business Combination) in an amount equal to the number of the Founder Shares times the grant date fair value per
share (unless subsequently modified) less the amount initially received for the purchase of the Founder Shares. The Company consummated its initial Business Combination on November 3, 2023 and the related stock compensation expense
will be recognized on that date.
The Sponsor, directors and executive
officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of: (A) one year after the
completion of the Initial Business Combination and (B) subsequent to the Initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange,
reorganization or other similar transaction that results in all of its public shareholders having the right to exchange their ordinary shares for cash, securities or other property (the “Lock-up”).
Advisory Agreement and Transfer of Founder Shares
On October 28,
2022, the Company and the Sponsor entered into a letter agreement with DDGN Advisors, LLC (the “Advisor”), pursuant to which the Advisor agreed to provide certain advisory, diligence and other similar services to the Company and the Sponsor
in connection with the Business Combination. As consideration for the Advisor’s performance of such services, the Sponsor agreed to transfer 3,350,000
of the Company’s Class B ordinary shares beneficially owned by the Sponsor to the Advisor at the closing of the Business Combination. The transfer of the Founder Shares to the Advisor is in the scope of ASC 718 whereby share-based
compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 3,350,000
shares to be transferred upon the consummation of the Business Combination is $16,386,643 or $4.89 per share. As of November 18, 2022, such shares were held by TRCA Subsidiary, an entity that is controlled by the Sponsor, and would revert
to the Sponsor if the Business Combination is not completed.
Due (to)/from Related Parties
The balance
of ($1,162 ) as of September 30, 2023 represents
operating expenses paid by an officer of the Company and the balance of $12,526 as of December 31, 2022 represents $12,973 of taxes paid by the Company, on behalf of the Sponsor, net of $447 in operating expenses paid by the Sponsor on behalf of the Company.
Promissory Note — Related Party
On March 10,
2023, the Company issued the Promissory Note to Carbon Revolution. The Promissory Note does not bear interest and matures upon closing of the Company’s Initial Business Combination. In the event that the Company does not consummate an Initial
Business Combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. The proceeds of the Promissory Note will be deposited in the Company’s Trust Account. As of September 30, 2023, there
was $1,120,000 outstanding under the Promissory Note. Subsequent to the nine-month period ended September 30, 2023 and as of the
issuance date of these financial statements, the Company has drawn an additional $160,000 under the Promissory Note for monthly extension through November 8, 2023.
Working Capital Loans
In order to finance transaction costs in
connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
If the Company completes the Initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, such loans may be repaid only out of funds held outside the
Trust Account. In the event that the Initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account
would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of
the post-Business Combination entity at a price of $1.50 per warrant at the option of the lender. As of September 30, 2023, and
December 31, 2022, the Company had no
Administrative Service Fee
Commencing on the date that the
Company’s securities are first listed on the New York Stock Exchange, the Company will reimburse the Sponsor or an affiliate of the Sponsor for office space, secretarial and administrative services provided to members of the management team, in
the amount of $10,000 per month. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will
cease paying these monthly fees. For each of the three and nine months ended September 30, 2023 and September 30, 2022, respectively, the Company incurred and
paid $30,000 90,000
| NOTE 6. |
FAIR VALUE MEASUREMENTS
|
The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as
of September 30, 2023 and December 31, 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
|
September 30,
2023
|
Quoted
Prices In
Active
Markets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
Marketable securities held in Trust Account
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Warrant Liability –Public Warrants
|
$
|
|
$ |
|
$
|
|
$
|
|
||||||||
|
Warrant Liability – Private Placement Warrants
|
|
|
|
|
||||||||||||
| Commitment fee shares liability |
||||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
December 31,
2022
|
Quoted
Prices In
Active
Markets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||||||||||||
|
Assets:
|
||||||||||||||||
|
Marketable securities held in Trust Account
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Warrant Liability – Public Warrants
|
$
|
|
$ |
$
|
|
$ | ||||||||||
|
Warrant Liability – Private Placement Warrants
|
|
|
|
|
||||||||||||
| Commitment fee shares liability |
||||||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Transfers to/from
Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. There were no
Public Warrants
The Company utilized a Monte Carlo simulation model for the initial valuation of the Public Warrants.
The subsequent
measurement of the Public Warrants at September 30, 2023 are classified as Level 2 due to the use of an observable marked quote in an inactive market. The subsequent measurement of the Public Warrants at December 31, 2022 are classified as
Level 1 due to the use of an observable market quote in an active market. As of September 30, 2023 and December 31, 2022, the aggregate value of Public Warrants was $533,431 and $213,799 , respectively.
The estimated fair value of the Private Placement Warrants on September 30, 2023 and December 31, 2022 is determined using Level 3 inputs.
Inherent in a Monte-Carlo simulation model are assumptions related to expected stock-price volatility (pre-merger and post-merger), expected term, dividend yield and risk-free interest rate. The Company estimates the volatility of its ordinary
shares based on management’s understanding of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury Constant Maturity similar to the expected remaining life of the
warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing an Initial Business Combination. The dividend rate is based on the historical rate, which the Company
anticipates to remain at zero
The assumptions used in calculating the estimated fair values represent the Company’s best estimate. However, inherent uncertainties are
involved. If factors or assumptions change, the estimated fair values could be materially different. The methodology of the expected term is a weighted average based on the likelihood of a successful Initial Business Combination.
The key inputs into the Monte Carlo simulation model for the warrant liability were as follows:
|
Input
|
September 30,
2023
|
December 31,
2022
|
||||||
|
Expected term (years) (1)
|
|
|
||||||
|
Expected volatility
|
|
%
|
|
%
|
||||
|
Risk-free interest rate
|
|
%
|
|
%
|
||||
|
Fair value of the ordinary share price
|
$
|
|
$
|
|
||||
|
(1)
|
|
The following table sets forth a summary of the changes in the fair value of the Level 3 warrant liability for the three and nine months ended September 30, 2023 and 2022:
|
September 30,
2023
|
||||
|
Fair value as of January 1, 2023
|
$
|
|
||
|
Revaluation of warrant liability included in other income within the statements of operations
|
|
|||
|
Fair value as of March 31, 2023
|
|
|||
|
Revaluation of warrant liability included in other income within the statements of operations
|
( |
) | ||
|
Fair value as of June 30, 2023
|
||||
|
Revaluation of warrant liability included in other income within the statements of operations
|
||||
|
Fair value as of September 30, 2023
|
$ | |||
|
September 30,
2022
|
||||
|
Fair value as of January 1, 2022
|
$
|
|
||
|
Revaluation of warrant liability included in other income within the statements of operations
|
(
|
)
|
||
|
Fair value as of March 31, 2022
|
|
|||
|
Revaluation of warrant liability included in other income within the statements of operations
|
( |
) | ||
|
Fair value as of June 30, 2022
|
||||
|
Revaluation of warrant liability included in other income within the statements of operations
|
( |
) | ||
| Fair value as of September 30, 2022 | $ | |||
Commitment Fee Shares
The estimated fair
value of the commitment fee shares liability on November 28, 2022 (initial measurement) is determined using Level 3 inputs. The expected term was based on management assumptions regarding the timing and likelihood of completing the Business
Combination. Management also estimated whether the Business Combination would be completed. The commitment fee shares liability is discounted to net present values using risk free rates. Discount rates were based on current risk-free rates
based on the actual simulated term using the following U.S. Treasury rates and using the linearly interpolated treasury rates between quoted terms.
The assumptions
used in calculating the estimated fair value represents the Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair value could be materially different.
The key inputs into the present value model for the
commitment fee shares liability were as follows:
|
Input
|
November 28,
2022
(Initial
Measurement)
|
December 31,
2022
|
September 30,
2023
|
|||||||||
|
Expected term (years)
|
|
|
|
|||||||||
|
Risk-free interest rate
|
|
%
|
|
%
|
|
%
|
||||||
|
Fair value of the ordinary
share price
|
$
|
|
$
|
|
$
|
|
||||||
As of September 30, 2023 and December 31, 2022, the fair value of the commitment fee shares liability was $151,049 and $147,469 , respectively, and is reflected on
the Company’s balance sheets with the corresponding expense charged to other income (expense).
| NOTE 7. |
COMMITMENTS AND CONTINGENCIES
|
Registration and Shareholders Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans
(and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and
shareholder rights agreement signed on March 3, 2021. The holders of these securities are entitled to make up to three demands,
excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its Initial
Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-up
period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the Initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from March 3, 2021 to purchase up to an additional 3,000,000 units to cover over-allotments.
On March 8, 2021, the Company paid a fixed underwriting discount of $4,000,000 , which was calculated as two percent (2 %) of the
gross proceeds of the IPO. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5 % of the gross
proceeds of the IPO held in the Trust Account, or $7,000,000 , upon the completion of the Company’s Initial Business Combination.
On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813 units. The option to purchase the remaining 1,691,187
units was unexercised and expired on April 19, 2021.
On November 15,
2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result,
the Company recognized $323,385 of other income attributable to derecognition of deferred underwriting fee allocated to offering
costs and $7,134,700 was recorded to additional paid-in capital in relation to the waiver of the deferred underwriting discount in
the accompanying condensed financial statements. As of September 30, 2023 and December 31, 2022, the deferred underwriting fee payable is $0
Commitment Fee Shares
In connection
with the CEF, the Company agreed to issue Yorkville 15,000 of the Company’s ordinary shares upon consummation of the Business
Combination. On October 5, 2023, the Company and Yorkville entered into Amendment No. 1 to the CEF (“Amendment to the CEF”) whereby the CEF was amended to reflect a reduction of the commitment fee payable to Yorkville from 15,000 MergeCo Ordinary Shares to 1,500
MergeCo Ordinary Shares (see Note 9).
Service Provider Agreements
From time to
time the Company has entered into and may enter into agreements with various services providers and advisors, including investment banks, to help us identify targets, negotiate terms of potential Initial Business Combinations, consummate an
Initial Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service providers and advisors fees in connection with their services to the extent that certain
conditions, including the closing of a potential Initial Business Combination, are met. If an Initial Business Combination does not occur, the Company would not expect to be required to pay these contingent fees. During the nine-months
ended September 30, 2023, the Company recognized approximately $2.0 million in fees for service providers, which are included in
accrued expenses on the Company’s Balance Sheets as of September 30, 2023. These fees are payable upon the closing of the consummation of the initial Business Combination on November 3, 2023.
During the year
ended December 31, 2022, the Company entered into a contingent fee agreement with a service provider whereby the conditions for payment were met prior to December 31, 2022. The aggregate fees are $525,000
| NOTE 8. |
SHAREHOLDERS’ DEFICIT
|
Preference Shares - The Company is authorized to issue 1,000,000
preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be
determined from time to time by the Company’s board of directors. As of September 30, 2023 and December 31, 2022, there were no
Class A Ordinary Shares - The Company is authorized to issue 500,000,000
Class A ordinary shares with a par value of $0.0001 per share. As of September 30, 2023 and December 31, 2022, there were none 6,266,645 shares and 21,308,813
Class A ordinary shares subject to possible redemption, respectively.
Class B Ordinary Shares - The Company is authorized to issue 50,000,000
Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. At September 30, 2023 and December 31, 2022, there were 5,327,203 1,308,813 Units. As a result, 422,797
Founder Shares were forfeited on April 19, 2021.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a
vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock
exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The Class B ordinary shares will automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon
conversion will not have redemption rights or be entitled to liquidating distributions if the Company does not consummate an Initial Business Combination, at the time of the Initial Business Combination or earlier at the option of the holders
thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis, 20 % of the sum of (i) the total number of ordinary shares issued and outstanding upon the completion of the IPO, plus (ii) the total number of Class A ordinary shares
issued, deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued by the Company in connection with or in relation to the consummation of the Initial Business Combination, excluding
any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued or to be issued to any seller in the Initial Business Combination and any Private Placement Warrants
issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one -to-one.
| NOTE 9. |
SUBSEQUENT EVENTS
|
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the unaudited
condensed financial statements were issued. Based upon this review, other than as disclosed below or within these unaudited condensed financial statements, the Company did not identify any subsequent events that would have required adjustment
or disclosure in the unaudited condensed financial statements.
Promissory Note – Related Party
As of the issuance date of these financial statements, the Company has drawn an additional $160,000 under the Promissory Note for monthly
extension through November 8, 2023.
Amendment to Scheme and Amendment to Business Combination Agreement
On September 21, 2023, the parties agreed to amend the Scheme attached to the Scheme Implementation Deed and on October 4, 2023 the amendment to
the Scheme Implementation Deed was effected. Under the terms of the Amendments taken together, the parties agreed to revise the merger ratios from 0.00877
MergeCo Ordinary Shares, par value $0.0001 , per Carbon Revolution ordinary share to between 0.00640 and 0.00643 MergeCo
Ordinary Shares per fully paid ordinary share in the capital of Carbon Revolution Shares (depending on the redemption rate of Twin Ridge Class A Ordinary Shares, par value $0.0001 , and 0.10 MergeCo Ordinary Shares per Twin
Ridge Class A Ordinary Share and Class B ordinary shares of Twin Ridge, par value $0.0001 , subject to obtaining a necessary
order of the Federal Court of Australia and any alterations or conditions made or required by the court. Any fractional shares resulting from the conversion will be rounded down to the nearest whole number. In addition, the End Date (as
defined in the Scheme Implementation Deed) in the Scheme Implementation Deed was amended to be November 30, 2023 and the parties consented to the OIC financing described in the additional definitive proxy materials of MergeCo filed with
the SEC on September 25, 2023 and the entry into fee deferral arrangements with various advisors and other vendors to Carbon Revolution, MergeCo and the Company with respect to certain transaction expenses.
The merger ratios were agreed to be amended on October 5, 2023 subject to the order of the Federal Court of Australia to reduce the total number of MergeCo Ordinary Shares to be issued in the Business Combination on a one share per ten share basis, affecting all recipients of MergeCo Ordinary Shares equally. Accordingly, the relative share ownership of holders of Twin Ridge Class A Ordinary Shares who do not redeem, holders of Carbon Revolution ordinary shares, holders of Carbon Revolution performance rights and Yorkville Advisors Global, LP, as well as the percentage of shares issuable pursuant to the FY2023 Incentive Equity Plan or upon exercise of any warrants, shall be unaffected by the adjustment of the merger ratios, except for minor adjustments due to the treatment of fractional shares. Such adjustment is intended to result in a higher trading price for MergeCo Ordinary Shares without altering any of the economic terms of the Business Combination.
Amendment to Standby Equity Purchase Agreement
On October 5, 2023, the Company and Yorkville entered into Amendment No. 1 to the CEF (“Amendment to the CEF”). Related to the foregoing description of the MergeCo Ordinary Share
reduction on a one share per ten share basis, the CEF was similarly amended to reflect a reduction of the commitment fee payable to Yorkville from 15,000 MergeCo Ordinary Shares to 1,500 MergeCo Ordinary Shares. All other provisions of the
Standby Equity Purchase Agreement were unaffected by such amendment.
General Meeting
On October 12, 2023, the Company held an extraordinary general meeting of its shareholders (the “General Meeting”), at which holders of 10,445,986 ordinary shares held of record as of August 25, 2023, the record date for the General Meeting (the “Record Date”), were present in person or by proxy,
representing approximately 90.09 % of the voting power of Twin Ridge’s ordinary shares as of the Record Date, and constituting
a quorum for the transaction of business. The proposals listed below are defined and described in greater detail in Twin Ridge’s definitive proxy statement, which was filed with the SEC on September 11, 2023, as supplemented by the
additional definitive proxy materials filed on September 25, 2023 and October 5, 2023. The shareholders approved the Business Combination Proposal, the Merger Proposal, and the Equity Incentive Proposal.
In connection with the General Meeting and the Business Combination, the holders of 6,201,815
of Twin Ridge’s outstanding Class A ordinary shares, par value $0.0001 per share, exercised their right to redeem their shares
for cash at a redemption price of approximately $10.77 per share, for an aggregate redemption amount of approximately $66,773,355 .
Business Combination
On November 3, 2023, the Parties consummated the Business Combination, as described in Note 1 above.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
References to the “Company,” “Twin Ridge Capital Acquisition Corp.,” “our,” “us” or “we” refer to Twin Ridge Capital Acquisition Corp. The following discussion and analysis of the Company’s financial condition and
results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on the Form 10-Q (the “Report”). Certain information contained in the
discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Report, including, without limitation, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our recently completed Business Combination with
Carbon Revolution, includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements can be identified by the use of forward-looking terminology,
including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable
terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our ability to consummate any acquisition or other Initial
Business Combination and any other statements that are not statements of current or historical facts. These statements are based on management’s current expectations, but actual results may differ materially due to various factors, including, but
not limited to:
| • |
our expectations around the performance of a Carbon Revolution or MergeCo;
|
| • |
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the Business Combination; or
|
| • |
the other risks and uncertainties discussed in “Risk Factors” and our other reports filed with the SEC, including our Form 10-K/A.
|
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurances 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. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our Form 10-K/A. Should one
or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Overview
Except as the context otherwise requires, the following description relates to periods prior to the consummation of the Business Combination, which occurred on November 3, subsequent to the end of the period
covered by this Report.
We are a blank check company incorporated on January 7, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization,
reorganization or similar business combination with one or more businesses or entities. On March 6, 2023, we held an Extension Meeting to amend our amended and restated memorandum and articles of association to extend the date by which we have to
consummate an Initial Business Combination. In connection with that vote, the holders of 15,042,168 Class A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount of approximately
$153,567,547 or $10.21 per share.
On October 12, 2023, the Company held a General Meeting, at which holders of 10,445,986 ordinary shares held as of the Record Date of August 25, 2023, were present in person or by proxy, representing approximately
90.09% of the voting power of our ordinary shares as of the Record Date, and constituting a quorum for the transaction of business. The proposals listed below are defined and described in greater detail in Twin Ridge’s definitive proxy statement,
which was filed with the SEC on September 11, 2023, as supplemented by the additional definitive proxy materials filed on September 25, 2023 and October 5, 2023. The shareholders approved the Business Combination Proposal, the Merger Proposal,
and the Equity Incentive Proposal.
In connection with the General Meeting and the Business Combination, the holders of 6,201,815
Class A ordinary shares of the Company exercised their right to redeem their shares for cash at a redemption price of approximately $10.77 per share, for an aggregate
redemption amount of approximately $66,773,355.
We intend to effectuate our initial Business Combination using cash from the proceeds of our IPO and the private placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection
with our initial Business Combination (pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of our IPO or otherwise), shares issued to the owners of the target, debt issued to bank or other
lenders or the owners of the target, or a combination of the foregoing or other sources.
The issuance of additional shares in an Initial Business Combination:
| • |
may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary
shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
|
| • |
may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares;
|
| • |
could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors;
|
| • |
may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
|
| • |
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
|
| • |
may not result in adjustment to the exercise price of our warrants.
|
Similarly, if we issue debt or otherwise incur significant debt, it could result in:
| • |
default and foreclosure on our assets if our operating revenues after an Initial Business Combination are insufficient to repay our debt obligations;
|
| • |
acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
|
| • |
our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
|
| • |
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
|
| • |
our inability to pay dividends on our Class A ordinary shares;
|
| • |
using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and
other general corporate purposes;
|
| • |
limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
|
| • |
increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
|
| • |
limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who
have less debt.
|
We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
Recent Developments
Business Combination
On November 3, 2023, the Parties consummated the Business Combination, as described in Note 1 to our unaudited consolidated financial statements in Part I, Item 1 of this Report above.
Results of Operations
Our entire activity since inception up to September 30, 2023 relates to our formation, our initial public offering and, since the closing of our initial public offering, a search for an Initial Business Combination
candidate. We will not be generating any operating revenues until the closing and completion of our Initial Business Combination, at the earliest.
For the three months ended September 30, 2023, we had net loss of $2,674,972, which was comprised of change in fair value of warrants of $247,266 and operating costs of $3,294,176, offset by trust interest income
of $860,346 and change in fair value of commitment fee shares of $6,124.
For the three months ended September 30, 2022, we had net income of $1,230,026, which was comprised of change in fair value of warrants of $489,003, and trust interest income of $937,158, offset by operating costs
of $196,135.
For the nine months ended September 30, 2023, we had net loss of $2,631,395, which was comprised of change in fair value of warrants of $555,097, change in fair value of commitment fee shares of $3,580 and
operating costs of $5,570,443, offset by trust interest income of $3,497,725.
For the nine months ended September 30, 2022, we had net income of $7,159,799, which was comprised of change in fair value of warrants of $6,622,103, and trust interest income of $1,169,625, offset by operating
costs of $631,929.
Going Concern and Liquidity
As of September 30, 2023, the Company had approximately $51,000 in its operating bank account and working capital deficit of approximately $10.0 million.
Until the consummation of an Initial Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due
diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Initial Business Combination.
We may need to raise further additional capital through loans or additional investments from our Sponsor, shareholders, officers, directors, or third parties. Our officers, directors and Sponsor may, but are not
obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain additional financing. If we are unable
to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing
overhead expenses. We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
On March 10, 2023, the Company issued the Promissory Note to Carbon Revolution. The Promissory Note does not bear interest and matures upon closing
of the Company’s initial Business Combination. In the event that the Company does not consummate a Business Combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. The proceeds of the
Promissory Note will be deposited in the Trust Account. As of September 30, 2023, there was $1,120,000 outstanding under the Promissory Note. Subsequent to the nine-month ended period September 30, 2023 and as of the issuance date of these
financial statements, the Company has drawn an additional $160,000 under the Promissory Note for an extension
through November 8, 2023.
The Company had until March 8, 2024, as applicable under the Amended and Restated Articles of Association to consummate an Initial Business Combination. The Company’s management has determined that the liquidity
condition raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the Company’s carrying amounts of assets or liabilities. As noted above, the Company’s Initial Business Combination
was consummated on November 3, 2023.
Critical Accounting Policies and Estimates
The preparation of the unaudited condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have identified the
following as our critical accounting policies:
Ordinary Shares Subject to Possible Redemption
All of the 21,308,813 Class A ordinary shares sold as part of the Units in our IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if
there is a shareholder vote or tender offer in connection with the Initial Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC and its
staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent
equity. Therefore, all Class A ordinary shares has been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases
or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.
In connection with the March 6, 2023 vote, the holders of 15,042,168 Class A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount of approximately
$153,567,547 or $10.21 per share.
In connection with the October 12, 2023 vote, the holders of 6,201,815 Class
A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount of approximately $66,773,355 or $10.77 per share.
Net (Loss) Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 12,210,780
potential Class A ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 because the warrants are contingently
exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815.
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification
under ASC 815, including whether the warrants are indexed to the Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant
issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or
modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss on the statement of operations. The initial fair value of the Private Placement Warrants and Public Warrants were estimated using a discounted cash flow model.
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 815. Derivative instruments are
initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments
should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether net-cash settlement or conversion of the
instrument could be required within 12 months of the balance sheet date.
Standby Equity Purchase Agreement
The Company accounts for its CEF as either equity-classified or liability-classified instruments based on an assessment of the agreement’s specific terms and applicable authoritative guidance in ASC 480 and ASC
815. The assessment considers whether the CEF is a freestanding financial instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the CEF meets all of the requirements for equity classification under
ASC 815, including whether the CEF is indexed to the Company’s Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at date of the agreement and
as of each subsequent quarterly period end date while the CEF is outstanding. For an agreement that meets all of the criteria for equity classification, the CEF would be required to be recorded as a component of additional paid-in capital at the
time of issuance.
For an agreement that does not meet all the criteria for equity classification, the CEF would be required to be recorded at its initial fair value on the date of issuance. The fair value of the CEF is remeasured at
each balance sheet date with the change in the estimated fair value of the CEF recognized as a non-cash gain or loss on the statements of operations. The Company has analyzed the CEF (as defined in Note 1) and determined it is considered to be a
freestanding instrument and does not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480.
Commitment Fee Shares Liability
In connection with the CEF, the Company agreed to issue Yorkville 15,000 of the Company’s ordinary shares upon consummation of the Initial Business
Combination. On October 5, 2023, the Company and Yorkville entered into Amendment No. 1 to the CEF (“Amendment to the CEF”) whereby the CEF was amended to reflect a reduction of
the commitment fee payable to Yorkville from 15,000 MergeCo Ordinary Shares to 1,500 MergeCo Ordinary Shares. The Company recorded the fair value of the commitment fee shares liability on the balance sheets and the related expense on
its condensed statements of operations. The initial fair value of the commitment fee shares liability was estimated using a discounted cash flow model.
Off-Balance Sheet Arrangements
As of September 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be
allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not
comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new
or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an
“emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be
adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain
executive compensation related items such as the correlation between executive compensation and performance and comparisons of the principal executive officer’s compensation to median employee compensation. These exemptions will apply for a
period of five years following the completion of our initial public offering or until we are no longer an “emerging growth company,” whichever is earlier.
| Item 3. |
Quantitative and Qualitative Disclosure About Market Risk
|
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
| Item 4. |
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be
disclosed in Company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of September 30, 2023 (the “Evaluation Date”). Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures (as
defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of September 30, 2023 due to the material weakness identified for the year ended December 31, 2022.
Our disclosure controls and procedures were not effective as of December 31, 2022, due to the material weakness in analyzing complex financial instruments including the proper classification of warrants as
liabilities, redeemable Class A ordinary shares as temporary equity, and over-allotment as liability. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our interim financial statements were
prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the periods
presented.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
| Item 1. |
Legal Proceedings
|
Certain purported shareholders of the Company sent demand letters alleging deficiencies and/or omissions in the Registration Statement on Form F-4, filed by Carbon Revolution with the SEC initially on February 27,
2023 (as may be further amended). The Demands seek additional disclosures to remedy these purported deficiencies. The Company believes that the allegations in the Demands are meritless.
| Item 1A. |
Risk Factors.
|
In addition to the other information set forth in this Report, you should carefully consider our risk factors disclosed under “Item 1A. Risk Factors” included in our Form 10-K/A. Additional risks and uncertainties
not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
As of the date of this Report, there have been no material changes to the risk factors disclosed in our Form 10-K/A. 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 from Registered Securities
|
None
| Item 3. |
Defaults Upon Senior Securities
|
None.
| Item 4. |
Mine Safety Disclosures
|
Not applicable.
| Item 5. |
Other Information
|
None.
| Item 6. |
Exhibits.
|
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Exhibit
Number
|
Description
|
|
|
Certification of Co-Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
||
|
Certification of Co-Chief Executive Officer and Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
|
Certification of Co-Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
|
Certification of Co-Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
|
101.INS*
|
XBRL Instance Document
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF*
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XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB*
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XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
104*
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
|
* Filed herewith.
** Furnished herewith.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Date: November 20, 2023
|
Twin Ridge Capital Acquisition Corp.
|
|
|
|
|
|
|
|
By:
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/s/ Jacob Dingle
|
|
|
Name:
|
Jacob Dingle
|
|
|
Title:
|
Chief Executive Officer of Carbon Revolution Public Limited Company, the parent
company of Poppettell Merger Sub, as successor by merger to Twin Ridge Capital Acquisition Corp.
|
|
|
|
|
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Date: November 20, 2023
|
By:
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/s/ Gerard Buckle
|
|
|
Name:
|
Gerard Buckle
|
|
|
Title:
|
Chief Financial Officer of Carbon Revolution Public Limited Company, the parent
company of Poppettell Merger Sub, as successor by merger to Twin Ridge Capital Acquisition Corp.
|
29