Vision Sensing Acquisition (VSAC) - 2023 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Presents comprehensive financial data, including statements, notes, management's analysis, market risk, and controls Item 1. Financial Statements Presents unaudited financial statements for Q2 2023, including Balance Sheets, Operations, Cash Flows, and detailed notes Balance Sheets Summarizes the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Balance Sheet Summary | Metric | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $17,847,665 | $105,192,121 | | Total Liabilities | $8,245,331 | $5,742,859 | | Class A common stock subject to possible redemption | $16,907,349 | $103,730,000 | | Total Shareholders' Deficit | $(7,305,015) | $(4,280,738) | - The company experienced a significant decrease in 'Cash and Marketable Securities held in trust account' from $105,082,318 at December 31, 2022, to $17,656,087 at June 30, 2023, primarily due to redemptions[11] Statements of Operations Presents the company's revenues, expenses, and net income or loss over specific reporting periods Statements of Operations Summary | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Formation and operating costs | $(1,117,860) | $(390,231) | | Franchise tax expenses | $(102,953) | $(30,924) | | Interest earned on marketable securities held in trust account | $1,826,992 | $149,059 | | Net income (loss) | $243,511 | $(272,097) | - The company shifted from a net loss of $(272,097) in the first six months of 2022 to a net income of $243,511 in the same period of 2023, largely driven by a substantial increase in interest earned on marketable securities held in the trust account[13] Statements of Changes in Stockholders' Equity Details changes in equity components, including accumulated deficit, from December 2022 to June 2023 Stockholders' Equity Changes | Metric | December 31, 2022 (Audited) | June 30, 2023 (Unaudited) | | :-------------------------- | :-------------------------- | :------------------------ | | Accumulated Deficit | $(4,281,038) | $(7,305,315) | - The accumulated deficit increased from $(4,281,038) at December 31, 2022, to $(7,305,315) at June 30, 2023, reflecting the net loss and other adjustments during the period[16] Statements of Cash Flows Reports cash inflows and outflows from operating, investing, and financing activities for the period Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(402,646) | $(433,661) | | Net cash provided by investing activities | $90,265,222 | $- | | Net cash used in financing activities | $(89,742,648) | $- | | Net change in cash | $119,928 | $(433,661) | | Cash at the end of the period | $191,578 | $65,640 | - Significant cash movements in 2023 included $90.27 million provided by investing activities (primarily cash withdrawal from the trust account) and $89.74 million used in financing activities (primarily payments to redeemed shareholders)[19] Notes to Unaudited Financial Statements Provides detailed explanations and additional information supporting the unaudited financial statements Note 1 — Description of Organization and Business Operations Describes the company's formation, business purpose, proposed combination, and going concern considerations - Vision Sensing Acquisition Corp. is a blank check company formed on August 13, 2021, for the purpose of a business combination, with its Initial Public Offering completed on November 3, 2021, raising $88,000,000[22][25] - The company entered into a Business Combination Agreement with Newsight Imaging Ltd. on August 30, 2022, which was subsequently amended to extend the 'Outside Date' for completion to May 3, 2023[35][41] - Stockholders approved a First Charter Amendment on May 1, 2023, allowing for up to six one-month extensions to November 3, 2023, for the business combination, with the Sponsor depositing $72,562.86 per month into the Trust Account for each extension[47][48] - In connection with the First Charter Amendment, holders of 8,507,492 Public Shares exercised their right to redeem shares for approximately $90.2 million, leaving 1,612,508 Public Shares outstanding[48] - The company faces substantial doubt about its ability to continue as a going concern if it cannot complete a Business Combination by September 3, 2023 (extendable to November 3, 2023)[51][55] Note 2 — Summary of Significant Accounting Policies Outlines the key accounting principles, estimates, and judgments applied in preparing the financial statements - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[60][61] Class A Common Stock Redemption Details | Metric | June 30, 2023 | December 31, 2022 | | :------------------------------------------------- | :------------ | :---------------- | | Class A Common Stock subject to possible redemption (shares) | 1,612,508 | 10,120,000 | | Contingently redeemable Class A Common Stock – Ending Balance | $16,907,349 | $103,730,000 | - The provision for income taxes was $362,668 for the six months ended June 30, 2023, compared to $0 for the same period in 2022[70] Note 3 — Public Offering Details the terms and proceeds of the company's Initial Public Offering, including units and warrants - The company sold 10,120,000 Units at $10.00 per Unit in its Initial Public Offering, with each Unit consisting of one common stock and three-quarters of one redeemable Warrant[83] Note 4 — Private Placement Describes the private placement of units to the Sponsor and the gross proceeds generated - An aggregate of 472,700 Private Placement Units were sold to the Sponsor at $10.00 per Unit, generating gross proceeds of $4,727,000, with a portion added to the Trust Account[84][85] Note 5 — Related Party Transactions Discloses transactions and balances with related parties, including the Sponsor and its principals - The Sponsor holds 2,530,000 Class B common stock (Founder Shares) purchased for $25,000[87] - The company has a Sponsor Working Capital Loan of $463,800 outstanding as of June 30, 2023, and issued non-interest bearing, unsecured promissory notes totaling $2,241,891 to the Sponsor for extension funding[92][93] - Dr. George Cho Yiu So, a principal of the Sponsor, advanced $1,000,000 to the company, which was then advanced to Newsight for bridge financing[94] Note 6 — Commitments and Contingencies Outlines the company's contractual obligations, registration rights, and deferred underwriting fees - The company has registration rights agreements for Founder Shares, Private Placement Units, and Warrants[96] - Underwriters received a cash discount of $2,024,000 and are entitled to a deferred fee of $3,542,000, payable upon the closing of a Business Combination[99] Note 7 – Stockholders' Equity Details the authorized and outstanding shares for different stock classes and warrant terms Stock Authorization and Issuance | Stock Class | Shares Authorized | Shares Issued & Outstanding (June 30, 2023) | | :---------------- | :---------------- | :------------------------------------------ | | Preferred Stock | 1,000,000 | 0 | | Class A Common Stock | 100,000,000 | 472,700 (excluding 1,612,508 redeemable) | | Class B Common Stock | 10,000,000 | 2,530,000 | - Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from the IPO closing, and expire five years after a Business Combination or earlier upon redemption or liquidation[108] Note 8 – Subsequent Events Reports significant events occurring after the balance sheet date, such as extension payments - On August 1, 2023, the Sponsor deposited an additional $72,562.86 into the Trust Account, extending the Business Combination deadline to September 3, 2023[117] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's perspective on financial condition, operational results, proposed business combination, and liquidity Overview Introduces Vision Sensing Acquisition Corp. as a blank check company focused on vision sensing technologies - Vision Sensing Acquisition Corp. is a blank check company focused on identifying and combining with a target business in vision sensing technologies[121] Proposed Business Combination Details the agreement with Newsight Imaging Ltd. and the structure of the planned merger - The company entered into a Business Combination Agreement with Newsight Imaging Ltd. on August 30, 2022, which has been amended to extend the 'Outside Date' to May 3, 2023[123][124] - The merger will result in the company becoming a wholly-owned subsidiary of Newsight, with company common stock converting to Newsight Ordinary Shares on a one-for-one basis[123] Registration Statement Describes Newsight's filing of Form F-4 with the SEC for the issuance of shares and warrants - Newsight filed a Registration Statement on Form F-4 with the SEC on December 8, 2022, and subsequently filed three amendments, to register the issuance of Newsight Ordinary Shares and warrants in connection with the Business Combination[126] Charter Amendment Explains the stockholder approval for charter amendments allowing extensions and subsequent share redemptions - Stockholders approved a First Charter Amendment on May 1, 2023, allowing for up to six one-month extensions to November 3, 2023, for the Business Combination, with the Sponsor making monthly Extension Payments[128][129] - Following the approval, holders of 8,507,492 Public Shares redeemed their shares for approximately $90.2 million[129] Extensions Details the one-month extensions obtained for the Business Combination deadline and Sponsor contributions - The company obtained four one-month extensions, extending the Termination Date to September 3, 2023, with the Sponsor depositing $72,562.86 for each extension[131] Results of Operations Analyzes the company's financial performance, focusing on net income/loss and key cost drivers Operational Results Summary | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $243,511 | $(272,097) | | Interest earned on investments held | $1,826,992 | $149,059 | | Formation and operating costs | $1,117,860 | $390,231 | - The increase in net income for the six months ended June 30, 2023, was primarily due to higher interest rates on marketable securities held in the trust account, while operating costs increased due to legal and professional fees for de-SPAC transactions[135] Liquidity and Capital Resources Discusses the company's cash position, trust account activity, outstanding loans, and going concern warning - As of June 30, 2023, the company had $17,656,087 in the Trust Account and $191,578 in cash outside the Trust Account[137][138] - During the six months ended June 30, 2023, $90,090,439 was withdrawn from the Trust Account for redeemed Public Shares, and $392,674 for taxes[137] - The company has outstanding loans from its Sponsor, including a working capital loan of $463,800 and extension loans totaling $2,241,891[139][140] - The company has determined that its liquidity condition and the mandatory liquidation date raise substantial doubt about its ability to continue as a going concern if a Business Combination is not completed by September 3, 2023 (extendable to November 3, 2023)[143] Off-Balance Sheet Financing Arrangements Confirms the absence of any off-balance sheet obligations, assets, or liabilities for the company - The company has no obligations, assets, or liabilities considered off-balance sheet arrangements[144][145] Contractual Obligations Outlines the company's financial commitments, including loans, administrative fees, and deferred underwriting fees - Contractual obligations include non-interest-bearing promissory notes to the Sponsor for working capital ($463,800) and extensions ($2,241,891), an administrative fee of $10,000 per month to the Sponsor, and a deferred underwriting fee of $3,542,000 payable upon Business Combination[146][147][150][151] Critical Accounting Policies Highlights key accounting policies involving significant estimates and judgments in financial reporting - Key accounting policies involve estimates and judgments related to the fair value of financial instruments and accrued expenses[152] Net Loss Per Ordinary Share Explains the calculation of net income (loss) per share, excluding dilutive effects of warrants - Net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common stock shares outstanding, excluding the dilutive effect of warrants due to future contingencies[153][154] Class A Common Stock Subject to Possible Redemption Describes the classification and redemption value of conditionally redeemable Class A common stock - Conditionally redeemable Class A common stock is classified as temporary equity, with changes in redemption value recognized immediately. As of June 30, 2023, the redemption value was $16,907,349[155] - Following the First Charter Amendment approval on May 1, 2023, 8,507,492 Public Shares were redeemed for approximately $90.2 million[156] Item 3. Quantitative and Qualitative Disclosures About Market Risk Addresses the company's exposure to market risks, specifically interest rate risk from trust account investments - The net proceeds in the Trust Account are invested in short-term U.S. government treasury bills, notes, or bonds with maturities of 185 days or less, or in money market funds investing solely in U.S. treasuries[157] - Due to the short-term nature of these investments, the company does not believe there is a material exposure to interest rate risk[157] Item 4. Controls and Procedures Details evaluation of disclosure controls and procedures and information on internal controls over financial reporting Evaluation of Disclosure Controls and Procedures Concludes on the effectiveness of the company's disclosure controls and procedures as of June 30, 2023 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[159] Management's Report on Internal Controls over Financial Reporting Explains the absence of a management's assessment or attestation report due to transition period - This report does not include a management's assessment or an attestation report from the public accounting firm regarding internal control over financial reporting, due to a transition period for newly public companies[161] Changes in Internal Control over Financial Reporting States no material changes occurred in internal control over financial reporting during the quarter - There were no changes in internal control over financial reporting during the fiscal quarter ended June 30, 2023, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[162] PART II - OTHER INFORMATION Provides additional information on legal proceedings, risk factors, equity sales, and other disclosures Item 1. Legal Proceedings Confirms the absence of any pending or contemplated legal proceedings against the company or its officers and directors - There is no litigation currently pending or contemplated against the company, its officers, or directors[165] Item 1A. Risk Factors Outlines material risks, uncertainties, and factors impacting the company, especially regarding business combination completion - Key risks include the inability to realize anticipated benefits of an initial Business Combination, potential unanticipated expenses or delays, challenges in selecting a suitable target business within the prescribed timeframe, and difficulties in obtaining additional financing[166] - Other risks involve potential conflicts of interest among officers and directors, the possibility of Trust Account funds not being protected against third-party claims or bankruptcy, and the impact of changes in laws or regulations[166] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details unregistered equity sales and explains use of public offering proceeds and trust account allocations Unregistered Sales of Equity Securities Details the private placement of units to the Sponsor and the gross proceeds generated - On November 3, 2021, the company consummated the Private Placement of 472,700 Private Placement Units to its Sponsor at $10.00 per Unit, generating gross proceeds of $4,727,000, pursuant to an exemption from registration[167] Use of Proceeds from the Public Offering Explains the allocation of IPO proceeds to the Trust Account and for operational expenses and extensions - The Initial Public Offering generated gross proceeds of $101,200,000, with $102,718,000 placed in the Trust Account, after accounting for underwriting discounts and other offering costs[169][170][172] - The Sponsor has made multiple deposits into the Trust Account to extend the Business Combination deadline, with the current deadline being September 3, 2023, extendable to November 3, 2023[174] - As of June 30, 2023, the company had $191,578 in cash on its balance sheet and a working capital of $9,602,334[175] Item 3. Defaults Upon Senior Securities States that the company has not experienced any defaults upon senior securities - There are no defaults upon senior securities[176] Item 4. Mine Safety Disclosures Indicates that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[177] Item 5. Other Information States that there is no other information to report - No other information is reported in this section[177] Item 6. Exhibits Lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q - Exhibits include the First Amendment to the Amended and Restated Certificate of Incorporation, Amendment No. 1 to Investment Management Trust Agreement, and certifications from the Principal Executive and Financial Officers[179]