Vision Sensing Acquisition (VSAC) - 2022 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed financial statements and notes covering organization, accounting, IPO, private placement, related parties, commitments, and equity structure Condensed Balance Sheets | Metric | June 30, 2022 (Unaudited) | December 31, 2021 (Audited) | | :--------------------------------- | :-------------------------- | :-------------------------- | | Cash | $65,640 | $499,301 | | Cash and Marketable Securities held in trust account | $102,874,692 | $102,725,633 | | Total Assets | $102,968,486 | $103,263,034 | | Total Liabilities | $3,643,925 | $3,666,376 | | Total Shareholders' Deficit | $(3,393,439) | $(3,121,342) | Unaudited Condensed Statement of Operations | Metric | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Formation and operating costs | $(225,785) | $(390,231) | | Franchise Tax | $(30,924) | $(30,924) | | Loss from Operations | $(256,709) | $(421,155) | | Interest earned on marketable securities held in trust account | $138,714 | $149,059 | | Net Loss | $(117,995) | $(272,097) | | Basic and diluted net loss per Class A common stock | $(0.01) | $(0.02) | | Basic and diluted net loss per Class B common stock | $(0.02) | $(0.03) | Unaudited Condensed Statement of Changes in Stockholders' Deficit | Metric | December 31, 2021 Balance | March 31, 2022 Balance | June 30, 2022 Balance | | :-------------------------- | :------------------------ | :--------------------- | :-------------------- | | Total Stockholders' Deficit | $(3,121,342) | $(3,393,444) | $(3,393,439) | | Net loss (Q1 2022) | - | $(154,102) | - | | Net loss (Q2 2022) | - | - | $(117,995) | Unaudited Condensed Statement of Cash Flows | Metric | Six Months Ended June 30, 2022 | | :------------------------------------------ | :----------------------------- | | Net loss | $(272,097) | | Interest earned on marketable securities held in Trust Account | $(149,059) | | Net cash used in operating activities | $(433,661) | | Net change in cash | $(433,661) | | Cash at the beginning of the period | $499,301 | | Cash at the end of the period | $65,640 | Notes to Condensed Financial Statements Note 1 — Description of Organization and Business Operations - Vision Sensing Acquisition Corp. was incorporated on August 13, 2021, as a blank check company to effect a business combination[20] - The Initial Public Offering (IPO) on November 3, 2021, generated $88,000,000 from 8,800,000 units, with an additional $13,200,000 from the full exercise of the over-allotment option[23][25] - A total of $102,718,000 from the IPO and private placements was deposited into a Trust Account, to be invested in U.S. government securities or money market funds[27] - The company has until November 3, 2022 (with potential extensions up to May 3, 2023) to consummate a Business Combination, after which it will liquidate and redeem public shares[34] - As of June 30, 2022, the company had $65,640 in cash outside the Trust Account and a working capital deficit of $8,131[29] - Management is evaluating the potential negative effects of the COVID-19 pandemic and the Russia-Ukraine conflict on the company's financial position and ability to complete a Business Combination[39][40] Note 2 — Summary of Significant Accounting Policies - The financial statements are prepared in accordance with U.S. GAAP and SEC rules[41] - The company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[42][43] - As of June 30, 2022, cash was $65,640, and the Trust Account balance was $102,874,692, primarily held in mutual funds[48][49] - Class A common stock subject to possible redemption (10,120,000 shares) is classified as temporary equity and adjusted to its redemption value ($10.15 per share) at each reporting period[55][56] - Net loss per share is calculated using the two-class method for redeemable Class A and non-redeemable Class B common stock[59] | Metric | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Net loss allocable to Class A common stock | $(68,502) | $(190,900) | | Basic and diluted net loss per redeemable Class A common stock | $(0.01) | $(0.02) | | Net loss allocable to non-redeemable Class B common stock | $(49,492) | $(81,197) | | Basic and diluted net loss per Class B common stock | $(0.02) | $(0.03) | Note 3 — Initial Public Offering - The Initial Public Offering involved the sale of 10,120,000 Units at $10.00 per Unit, generating gross proceeds of $101,200,000[68] - Each Unit consisted of one ordinary share and three-quarters of one redeemable warrant, with each whole warrant exercisable for one ordinary share at $11.50[68] Note 4 — Private Placement - The company consummated a private placement of 472,700 units to Vision Sensing LLC (the Sponsor) at $10.00 per unit, generating gross proceeds of $4,727,000[69] - Proceeds from the Private Placement Units were added to the Trust Account; these units will be worthless if a Business Combination is not completed[70] - Private Placement Warrants are subject to transfer restrictions until 30 days after the completion of an Initial Business Combination[71] Note 5 — Related Party Transactions - The Sponsor purchased 2,530,000 Class B ordinary shares (Founder Shares) for $25,000, representing approximately 20% of outstanding shares post-IPO, subject to lock-up provisions[72][73] - An unsecured promissory note from the Sponsor for up to $300,000 was fully repaid on November 8, 2021[76] - The Sponsor or affiliates may provide Working Capital Loans, repayable without interest upon Business Combination or convertible into units[77] - The Sponsor deposited $1,518,000 into the trust account[78] - The company pays the Sponsor $10,000 per month for administrative support; $80,000 was recorded as an expense through June 30, 2022[81] Note 6 — Commitments and Contingencies - Holders of Founder Shares, Private Placement Units, and certain warrants are entitled to registration rights[82] - Underwriters received a cash underwriting discount of $2,024,000 and are entitled to a deferred fee of $3,542,000, payable upon completion of a Business Combination[84] Note 7 – Stockholders' Equity - The company is authorized to issue 1,000,000 shares of preferred stock (none issued), 100,000,000 shares of Class A common stock (472,700 issued/outstanding excluding redeemable shares), and 10,000,000 shares of Class B common stock (2,530,000 issued/outstanding)[88][89][90] - Class B common stock holders have exclusive voting rights for director elections prior to a Business Combination and convert to Class A shares on a one-for-one basis (subject to adjustment) upon Business Combination[91][92] - Public Warrants become exercisable 30 days after a Business Combination or 12 months from IPO closing, expire five years after a Business Combination, and are redeemable by the company if Class A common stock price equals or exceeds $18.00[93][97] - Private Placement Warrants are identical to Public Warrants but are not redeemable by the company and have transfer restrictions for the Sponsor or its permitted transferees[99][134] Note 8 – Subsequent Events - Management has evaluated all events up to the financial statement issuance date and identified no subsequent events requiring adjustment or disclosure[100] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses the company's blank check status, financial performance, liquidity, capital resources, net loss, IPO/private placement reliance, and financing needs Overview - The company is a blank check company formed to effect a business combination, utilizing cash from its public offering and private placement, or a combination of cash, stock, and debt[103] - Issuing additional shares for a business combination may dilute equity, subordinate rights, cause a change in control, or adversely affect market prices[104] - Incurring significant debt could lead to default, acceleration of obligations, inability to obtain additional financing, and limitations on cash flow and business flexibility[105][108] Results of Operations - The company has not engaged in operations or generated revenues to date, with activities focused on organizational tasks, IPO preparation, and identifying a target company[106] - For the period from inception (August 13, 2021) through June 30, 2022, the company reported a net loss of $625,415[107] - The net loss consisted of $673,873 in formation and operating costs, $108,234 in franchise tax, offset by $156,692 in interest earned on investments[107] Liquidity and Capital Resources - The company consummated an IPO of 10,120,000 Units at $10.00 per Unit, generating gross proceeds of $101,200,000, and a private placement of 472,700 units for $4,727,000[109] - As of June 30, 2022, $102,874,692 was held in the Trust Account for the initial Business Combination, and $65,640 in cash was held outside the Trust Account for working capital[111][112] - Cash used in operating activities from inception through June 30, 2022, was $708,336[110] - The Sponsor or affiliates may provide Working Capital Loans to finance transaction costs, which may be repaid or converted into units[113] - Additional financing may be required if funds are insufficient for a Business Combination or due to significant public share redemptions[115] Off-Balance Sheet Financing Arrangements - The company has no off-balance sheet arrangements, special purpose entities, guaranteed debt, or commitments of other entities[116][117] Contractual Obligations - The company has no long-term debt, capital lease, or operating lease obligations[118] - Contractual obligations include a monthly administrative fee of $10,000 to the Sponsor and a deferred underwriting fee of $3,542,000, payable upon completion of a Business Combination[118][119] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, market risk disclosures are limited; Trust Account investments in short-term U.S. government securities have no material interest rate risk - As a smaller reporting company, extensive market risk disclosures are not required[120] - Proceeds in the Trust Account are invested in short-term U.S. government treasury bills, notes, or bonds (maturity of 185 days or less) or money market funds[120] - Due to the short-term nature of these investments, the company believes there is no material exposure to interest rate risk[120] Item 4. Controls and Procedures Evaluates disclosure controls and procedures, concluding effectiveness as of June 30, 2022, with no material changes in internal control during the quarter Evaluation of Disclosure Controls and Procedures - Management, including the principal executive officer and principal financial and accounting officer, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2022[123] - Based on this evaluation, disclosure controls and procedures were concluded to be effective at a reasonable assurance level[123] Changes in Internal Control over Financial Reporting - No changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[124] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings - The company reports no legal proceedings[126] Item 1A. Risk Factors Updates risk factors, addressing geopolitical conditions and new SEC proposed rules for SPACs, impacting business combination search and completion - Geopolitical conditions, specifically the Russia-Ukraine conflict and related sanctions, may materially and adversely affect the company's search for a Business Combination and the operations of any target business[128][129] - Changes in laws or regulations, particularly the SEC's proposed rules relating to SPACs issued on March 30, 2022, may increase costs, time, and constrain the circumstances for completing an initial business combination[130][131] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details unregistered equity sales to the Sponsor and outlines IPO proceeds use, including Trust Account allocation and underwriting costs Unregistered Sales of Equity Securities - On November 3, 2021, the company completed a private placement of 472,700 units to Vision Sensing LLC (Sponsor) at $10.00 per unit, generating gross proceeds of $4,727,000[132] - The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933[132] - Placement warrants are not redeemable by the company, have transfer restrictions for the Sponsor, may be exercised on a cashless basis, and are entitled to registration rights[134] Use of Proceeds from the Public Offering - The Initial Public Offering generated gross proceeds of $101,200,000 from the sale of 10,120,000 units (including over-allotment option)[135][136] - $102,718,000 of the gross proceeds from the IPO and Private Placement Units was placed in a Trust Account[138] - The company paid $2,024,000 in cash underwriting discounts and commissions and $436,024 for other offering costs, with an additional $3,542,000 in deferred underwriting discounts[138] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports no defaults upon senior securities[139] Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable - Mine Safety Disclosures are not applicable[140] Item 5. Other Information No other information is reported - No other information is reported[140] Item 6. Exhibits Lists all exhibits filed or incorporated by reference into Form 10-Q, including certifications and XBRL documents - The exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2)[142] - Various Inline XBRL Taxonomy Extension Documents (Instance, Calculation, Schema, Definition, Labels, Presentation) and the Cover Page Interactive Data File are also filed[142]