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TKB Critical Technologies 1(USCT) - 2024 Q2 - Quarterly Report
USCTTKB Critical Technologies 1(USCT)2024-08-14 20:05

Financial Performance - For the six months ended June 30, 2024, the company reported a net income of 510,213,consistingof510,213, consisting of 435,437 in interest earned on marketable securities and a 529,550changeinfairvalueofwarrantliabilities,offsetbyoperationalcostsof529,550 change in fair value of warrant liabilities, offset by operational costs of 454,774 [151]. - For the three months ended June 30, 2023, the company reported a net income of 7,284,593,primarilyduetoa7,284,593, primarily due to a 4,649,995 forgiveness of debt and a 2,712,275changeinfairvalueofwarrantliabilities[151].−Thecompanyhasnotgeneratedanyoperatingrevenuestodate,relyingsolelyonnon−operatingincomefrominterestoncashandcashequivalents[150].CapitalandFinancing−AsofJune30,2024,thecompanyhadcashof2,712,275 change in fair value of warrant liabilities [151]. - The company has not generated any operating revenues to date, relying solely on non-operating income from interest on cash and cash equivalents [150]. Capital and Financing - As of June 30, 2024, the company had cash of 78,787 and the Trust account was fully liquidated, indicating a need for further capital to identify and evaluate target businesses [156]. - A total of 234,600,000fromtheinitialpublicofferingandprivateplacementwarrantswasplacedinaU.S.−basedTrustAccount,indicatingsignificantcapitalraisedforfuturebusinesscombinations[154].−Thecompanyincurredtransactioncostsof234,600,000 from the initial public offering and private placement warrants was placed in a U.S.-based Trust Account, indicating significant capital raised for future business combinations [154]. - The company incurred transaction costs of 21,140,059 related to the initial public offering, which included 3,850,000inunderwritingdiscountsand3,850,000 in underwriting discounts and 8,800,000 in deferred underwriting discounts [155]. - The company had drawn 1,109,412onapromissorynoteofupto1,109,412 on a promissory note of up to 2,000,000 as of June 30, 2024, indicating ongoing financing efforts to support operations [157]. - The company expects to raise additional funds to meet operating expenditures prior to the initial business combination, incurring significant costs related to identifying a target business and conducting due diligence [158]. Business Combination and Shareholder Actions - The company extended the deadline for completing a business combination from June 29, 2023, to October 29, 2024, with shareholder approval, allowing for additional time to pursue potential mergers [146]. - The company received shareholder approval to extend the liquidation date of the Trust Account from January 29, 2023, to June 29, 2023, allowing for further capital deployment [145]. - The company distributed all remaining sums in the trust account to shareholders and allowed them to retain 10% of their shares after tax deductions and up to 100,000fordissolutionexpenses[159].SponsorandAdministrativeSupport−Thecompanyrecordedacontributionfromthesponsorof100,000 for dissolution expenses [159]. Sponsor and Administrative Support - The company recorded a contribution from the sponsor of 250,000 after the forgiveness of debt, reflecting support from the sponsor during financial challenges [149]. - The company had an agreement to pay its sponsor a monthly fee of 10,000forofficespaceandadministrativesupport,whichwasterminatedonJune28,2023[162].AccountingandReporting−Thecompanyaccountsforwarrantsbasedonspecifictermsandapplicableguidance,withsignificantestimatesincludingthefairvalueofwarrantliabilities[164].−AsofJune30,2024,thecompanyhadnoordinarysharessubjecttopossibleredemption,andchangesinredemptionvaluearerecognizedimmediately[167].−ThecompanydidnothaveanydilutivesecuritiesorcontractsthatcouldpotentiallybeconvertedintoordinarysharesasofJune30,2024[169].−Thecompanyisevaluatingtheimpactofrecentlyissuedaccountingstandards,includingASU2023−09,whichwillenhancetransparencyinincometaxdisclosures[171].−Thecompanyisclassifiedasasmallerreportingcompanyandisnotrequiredtoprovidecertainmarketriskdisclosures[173].Off−BalanceSheetFinancing−Thecompanyhasnooff−balancesheetfinancingarrangementsasofJune30,2024,anddoesnotparticipateintransactionsthatcreaterelationshipswithunconsolidatedentities[161].UnderwriterAgreements−Theunderwriterswaivedtheirentitlementtoadeferredfeeof10,000 for office space and administrative support, which was terminated on June 28, 2023 [162]. Accounting and Reporting - The company accounts for warrants based on specific terms and applicable guidance, with significant estimates including the fair value of warrant liabilities [164]. - As of June 30, 2024, the company had no ordinary shares subject to possible redemption, and changes in redemption value are recognized immediately [167]. - The company did not have any dilutive securities or contracts that could potentially be converted into ordinary shares as of June 30, 2024 [169]. - The company is evaluating the impact of recently issued accounting standards, including ASU 2023-09, which will enhance transparency in income tax disclosures [171]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [173]. Off-Balance Sheet Financing - The company has no off-balance sheet financing arrangements as of June 30, 2024, and does not participate in transactions that create relationships with unconsolidated entities [161]. Underwriter Agreements - The underwriters waived their entitlement to a deferred fee of 8,800,000, which would have been payable from the Trust Account upon completion of the initial business combination [163].