Integral Acquisition Corporation 1(INTEU) - 2022 Q2 - Quarterly Report

Part I. Financial Information This section provides the company's unaudited financial statements, management's analysis of financial condition, and disclosures on market risk and internal controls Financial Statements This section presents the unaudited condensed financial statements for Integral Acquisition Corporation 1, detailing its financial position and performance as a blank check company Condensed Balance Sheets The balance sheet as of June 30, 2022, shows total assets of $117.9 million, primarily trust account investments, and a $7.0 million stockholders' deficit Condensed Balance Sheet Data (as of June 30, 2022) | Metric | Amount (USD) | | :--- | :--- | | Assets | | | Cash | $733,822 | | Investments held in trust account | $116,789,245 | | Total Assets | $117,864,338 | | Liabilities & Equity | | | Total liabilities | $8,120,198 | | Class A common stock subject to possible redemption | $116,725,000 | | Total stockholders' deficit | $(6,980,860) | Condensed Statements of Operations The company reported a net loss of $1.47 million for the six months ended June 30, 2022, driven by operating costs and FPA liability changes Statement of Operations Summary (Unaudited) | Period | Formation and operating costs | Unrealized gain (loss) on FPA liability | Interest income | Net loss | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30, 2022 | $253,884 | $15,495 | $41,557 | $(196,832) | | Six Months Ended June 30, 2022 | $540,090 | $(990,062) | $55,836 | $(1,474,316) | Condensed Statements of Changes in Stockholder's (Deficit) Equity The stockholders' deficit increased to $(6,980,860) by June 30, 2022, primarily due to the net loss incurred during the period - The total stockholders' deficit grew to $(6,980,860) as of June 30, 2022, from $(5,506,544) at the end of 2021, with the change driven by a net loss of $(1,474,316) for the six-month period[18] Condensed Statements of Cash Flows Net cash used in operating activities was $575,343 for the six months ended June 30, 2022, reducing the cash balance to $733,822 Cash Flow Summary (Six Months Ended June 30, 2022) | Metric | Amount (USD) | | :--- | :--- | | Net cash used in operating activities | $(575,343) | | Net change in cash | $(575,343) | | Cash, beginning of the period | $1,309,165 | | Cash, end of the period | $733,822 | Notes to Unaudited Condensed Financial Statements These notes detail accounting policies, IPO terms, and significant disclosures, including substantial doubt about the company's going concern ability - The company is a blank check company formed to effect a Business Combination and has not yet selected a target[25] - The company has until May 5, 2023 (18 months from its IPO closing) to consummate a Business Combination, or it will be required to liquidate, which raises substantial doubt about its ability to continue as a going concern[37][44] - The Forward Purchase Agreement (FPA) is accounted for as a liability at fair value, subject to re-measurement each period, with changes recognized in the statement of operations[62][63] - All 11,500,000 shares of Class A common stock sold in the IPO are classified as temporary equity because they are subject to possible redemption[69] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial condition, liquidity, and results of operations, emphasizing its status as a blank check company and going concern risk - The company's activities since inception relate to its formation, IPO, and the ongoing search for a Business Combination target[120][130] Results of Operations Summary | Period | Net Loss | Key Drivers | | :--- | :--- | :--- | | Six Months Ended June 30, 2022 | $1,474,316 | Operating costs ($540,090) and unrealized loss on FPA liability ($990,062) | | Three Months Ended June 30, 2022 | $196,832 | Operating costs ($253,884) offset by unrealized gain on FPA liability ($15,495) and interest income ($41,557) | - As of June 30, 2022, the company had approximately $0.7 million in its operating bank account and working capital of approximately $1.0 million to fund its search for a business combination[126] - Management has determined that the mandatory liquidation if a business combination is not completed by May 5, 2023, raises substantial doubt about the company's ability to continue as a going concern[128] Quantitative and Qualitative Disclosures Regarding Market Risk The company's market risk is minimal, primarily related to interest rate fluctuations on short-term U.S. government treasury investments in the trust account - The company's primary market risk is related to interest rate fluctuations on the funds held in the Trust Account[157][158] - Because the Trust Account invests only in short-term U.S. government treasury obligations, the company believes its exposure to interest rate risk is not material[158] Controls and Procedures Management concluded that disclosure controls were ineffective as of June 30, 2022, due to material weaknesses in financial instrument valuation and unrecorded liabilities - The company's principal executive and financial officers concluded that disclosure controls and procedures were not effective as of June 30, 2022[161] - The ineffectiveness was due to an identified material weakness related to errors in fair value calculation of financial instruments and unrecorded liabilities[161] - Management is implementing a remediation plan that includes enhancing access to accounting literature and consulting with third-party professionals on complex accounting matters[161][162] Part II. Other Information This section covers legal proceedings, risk factors, equity sales, defaults, and other miscellaneous disclosures Legal Proceedings There is no current or contemplated litigation against the company or its officers and directors - To the knowledge of management, there is no current or contemplated litigation against the company[167] Risk Factors This section highlights risks from material weaknesses in internal control over financial reporting, potentially impacting financial accuracy and investor confidence - The company has identified material weaknesses in its internal control over financial reporting, which could negatively impact its ability to produce accurate and timely financial reports[167][168] - A material weakness is a deficiency that creates a reasonable possibility that a material misstatement of financial statements will not be prevented or detected in a timely manner[169] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities, and the planned use of IPO proceeds remains materially unchanged - There were no unregistered sales of equity securities in the period[172] - The planned use of proceeds from the IPO and private placement has not materially changed[172] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[173] Mine Safety Disclosures This item is not applicable to the company - Not applicable[174] Other Information The company reports no other information - None[175] Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Inline XBRL documents - Exhibits filed with the report include Certifications of the Principal Executive Officer and Principal Financial Officer, and various Inline XBRL documents[177]