Integral Acquisition Corporation 1(INTEU) - 2021 Q4 - Annual Report

PART I Item 1. Business Integral Acquisition Corporation 1 is a SPAC targeting a technology-oriented business combination in Australia/New Zealand by May 2023 - The company is a blank check company formed to effect a business combination, specifically targeting technology-oriented companies in Australia and/or New Zealand[23][24] Initial Public Offering Details | Metric | Value | | :--- | :--- | | IPO Consummation Date | November 5, 2021 | | Units Offered | 11,500,000 | | Price per Unit | $10.00 | | Gross Proceeds | $115,000,000 | | Amount Placed in Trust Account | $116,725,000 | | Business Combination Deadline | May 5, 2023 (18 months from IPO) | - The company's business strategy focuses on identifying a company in Australia or New Zealand with scalable technology, a proven business model, and an established management team, targeting sectors like AI, cybersecurity, SaaS, FinTech, and CleanTech[40] - The initial business combination must have an aggregate fair market value of at least 80% of the assets held in the trust account, and must be completed by May 5, 2023, or the company will liquidate and return funds to public stockholders[55][101] Market Opportunity Australia and New Zealand offer attractive market opportunities due to stable economies, skilled workforces, and ease of doing business - Australia and New Zealand are highlighted for their robust economies, entrepreneurial spirit, and as early adopters of technology, making them ideal for investment[30] - Both countries entered 2020 with low public debt compared to other advanced economies (Australia: 23.2% of GDP, New Zealand: 8.0% of GDP in 2019), positioning them well for economic recovery and support[32] - According to the World Bank, New Zealand and Australia ranked 1st and 14th, respectively, for ease of doing business in 2020, benefiting from diverse, skilled workforces and strong governance[34][36] Acquisition Criteria and Process The company seeks a target with a leading market position, competitive advantages, operational stability, and long-term growth potential - The evaluation process involves extensive due diligence, including meetings with management, document reviews, and interviews with customers and suppliers, leveraging the management team's network and expertise[49] - Key acquisition criteria include a sustainable market position in Australia/New Zealand, a disruptive business model, demonstrated operational stability, significant growth potential, and a capable management team[51] - If a business combination with an affiliated entity is pursued, the company must obtain a fairness opinion from an independent investment banking or valuation firm[50] Redemption Rights and Liquidation Public stockholders can redeem their shares for a pro-rata share of the trust account upon business combination or company liquidation - Public stockholders can redeem their shares for cash equal to their pro-rata share of the trust account upon the business combination, approximately $10.15 per share as of December 31, 2021[82] - A significant limitation on redemptions is that the company's net tangible assets must not fall below $5,000,001, and a public stockholder group is restricted from redeeming more than 15% of the shares sold in the IPO without prior consent[83][94] - If a business combination is not completed by the May 5, 2023 deadline, the company will dissolve and redeem public shares, rendering warrants worthless[101] Item 1A. Risk Factors The company lists material risks including blank check uncertainty, inability to complete a business combination, and potential conflicts of interest - The company is a blank check entity with no operational history, making it difficult to evaluate its ability to select a suitable business target[128] - Conflicts of interest may arise because initial stockholders and the sponsor will lose their entire investment if a business combination is not completed, potentially incentivizing unfavorable deals[134] - There is a risk that funds held in the trust account may not be protected against third-party claims or bankruptcy, potentially reducing the amount available for stockholder redemptions[128] Item 2. Properties The company's executive offices are in New York, NY, and Melbourne, Australia, provided by the sponsor for a monthly fee - The company utilizes office space at 667 Madison Avenue, New York, and 152 Elizabeth Street, Melbourne, Australia[132] - A monthly fee of $20,000 is paid to the sponsor for office space and administrative support services[132] Item 3. Legal Proceedings The company reports no current or contemplated litigation against the company, its officers, or directors - To the knowledge of management, there is no current or contemplated litigation against the company or its officers and directors[133] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The company's units, Class A common stock, and warrants trade on Nasdaq, with no cash dividends paid or intended prior to business combination Trading Information | Security | Symbol | Exchange | | :--- | :--- | :--- | | Units | INTEU | Nasdaq | | Class A Common Stock | INTE | Nasdaq | | Warrants | INTEW | Nasdaq | - As of March 8, 2022, there was one holder of record for units, one for Class A common stock, and two for warrants[137] - The company has not paid and does not intend to pay cash dividends prior to completing its initial business combination[138] - From the IPO and private placement warrant sale, a total of $116,725,000 was placed in a U.S.-based trust account[142] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The blank check company reported a net loss of $371,561 from inception to December 31, 2021, with liquidity sustained by IPO funds outside the trust account - The company is a pre-business combination blank check company, with all activity to date related to its formation, IPO, and search for a target[148][156] Financial Highlights (Inception to Dec 31, 2021) | Metric | Value (USD) | | :--- | :--- | | Net Loss | $371,561 | | Formation and Operating Costs | $385,971 | | Unrealized Gain on FPA Liability | $6,001 | | Interest Income from Trust Account | $8,409 | - Management has alleviated substantial doubt about the company's ability to continue as a going concern, stating that capital from the IPO is sufficient to sustain operations for at least one year[154] - The company has a contractual obligation to pay its sponsor $20,000 per month for office space and administrative support until a business combination or liquidation occurs[160] Item 7A. Quantitative and Qualitative Disclosures About Market Risk The company's market risk is minimal, primarily limited to interest rate risk on short-term U.S. government treasury bills in the trust account - The company has not engaged in any hedging activities and does not expect to[183] - Proceeds in the trust account are invested in U.S. government treasury bills with maturities of 185 days or less, minimizing interest rate risk[184] Item 9A. Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of December 31, 2021, with no internal control report yet required - The Certifying Officers concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[188] - A report on internal control over financial reporting is not included due to the transition period for newly public companies[190] PART III Item 10. Directors, Executive Officers and Corporate Governance This section lists the company's directors and executive officers, detailing board committees and compliance with ethical and filing requirements Executive Officers | Name | Position | | :--- | :--- | | Enrique Klix | Chief Executive Officer and Director | | Brittany Lincoln | Chief Financial Officer | - The Board of Directors includes James Cotton, Stuart Hutton, Niraj Javeri, and Lynne Thornton[195] - The board has an audit committee and a compensation committee, both comprised of independent directors, chaired by Stuart Hutton and Niraj Javeri respectively[205][206][209] Item 11. Executive Compensation No cash compensation is paid to executive officers or directors prior to the initial business combination, with the sponsor receiving a monthly administrative fee - No cash compensation is paid to executive officers or directors for services rendered to the company before a business combination[219] - The sponsor receives $20,000 per month for administrative services, and officers and directors are reimbursed for out-of-pocket expenses incurred on the company's behalf[219] - Post-combination compensation for executives and directors will be determined by the board of the combined company[220] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 8, 2022, the sponsor beneficially owns 100% of Class B common stock, representing 20% of total outstanding common stock Beneficial Ownership as of March 8, 2022 | Name of Beneficial Owner | Class | Number of Shares | Percentage of Class | Percentage of Total | | :--- | :--- | :--- | :--- | :--- | | Integral Sponsor LLC | Class B | 2,875,000 | 100% | 20% | | All executive officers and directors as a group | Class B | 2,875,000 | 100% | 20% | | Beryl Capital Management LLC | Class A | 955,706 | 8.31% | 6.65% | | Magnetar Financial LLC | Class A | 750,000 | 6.52% | 5.22% | Item 13. Certain Relationships and Related Transactions, and Director Independence This section details transactions with the sponsor, including founder share and private placement warrant purchases, administrative fees, and director independence determinations - The sponsor purchased 2,875,000 founder (Class B) shares for $25,000[229] - Simultaneously with the IPO, the sponsor purchased 4,950,000 private placement warrants at $1.00 per warrant for a total of $4,950,000[231] - The board of directors has determined that Stuart Hutton, Niraj Javeri, and Lynne Thornton are independent directors as defined by Nasdaq and SEC rules[241] Item 14. Principal Accountant Fees and Services Marcum LLP served as the independent registered public accounting firm, receiving fees for audit services related to annual financial statements, regulatory filings, and the IPO Accountant Fees for Year Ended Dec 31, 2021 | Fee Category | Amount (USD) | | :--- | :--- | | Audit Fees (Annual/Quarterly) | ~$194,000 | | Audit Fees (IPO-related) | ~$146,000 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | PART IV Item 15. Exhibit and Financial Statement Schedules This section lists documents filed as part of the Form 10-K report, including financial statements and various exhibits, with schedules omitted as not applicable - The report includes financial statements for the period from February 16, 2021 (inception) through December 31, 2021[250] - An index of exhibits filed with the report is provided, with many incorporated by reference from previous SEC filings[251][369] Financial Statements and Notes Financial Statements Audited financial statements as of December 31, 2021, show total assets of $118.5 million, liabilities of $7.3 million, a net loss of $371,561, and a stockholders' deficit of $5.5 million Balance Sheet Summary as of December 31, 2021 | Category | Amount (USD) | | :--- | :--- | | Assets | | | Cash | 1,309,165 | | Investments held in trust account | 116,733,409 | | Total Assets | 118,482,043 | | Liabilities | | | Total current liabilities | 205,653 | | Deferred underwriting commission | 6,050,000 | | Forward Purchase Agreement liability | 1,007,934 | | Total Liabilities | 7,263,587 | | Class A common stock subject to possible redemption | 116,725,000 | | Total stockholders' deficit | (5,506,544) | Statement of Operations (Inception to Dec 31, 2021) | Line Item | Amount (USD) | | :--- | :--- | | Formation and operating costs | (385,971) | | Unrealized gain on FPA liability | 6,001 | | Interest income | 8,409 | | Net loss | (371,561) | Notes to Financial Statements The notes detail the company's accounting policies, IPO terms, related-party transactions, and the accounting treatment for redeemable common stock, warrants, and the FPA liability - The company is a blank check company with an 18-month period from its November 5, 2021 IPO to complete a business combination[273][285] - All 11,500,000 shares of Class A common stock sold in the IPO are classified as temporary equity ('Common Stock Subject to Possible Redemption') on the balance sheet, as they are redeemable[315] - The company has entered into forward purchase agreements with Crescent Park and Carnegie Park to purchase up to 3,000,000 shares of Class A common stock for up to $30 million, concurrent with the initial business combination, accounted for as a Level 3 liability at fair value[343]