New Providence Acquisition Corp. II(NPABU) - 2024 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements Presents unaudited condensed financial statements for New Providence Acquisition Corp. II, including balance sheets, operations, equity, cash flows, and detailed notes Condensed Balance Sheets | Metric | March 31, 2024 (Unaudited) | December 31, 2023 | | :----------------------------------------- | :------------------------- | :---------------- | | Cash | $55,287 | $56,867 | | Marketable securities held in Trust Account| $57,411,866 | $56,981,202 | | Total Assets | $57,547,645 | $57,051,149 | | Total Current Liabilities | $4,147,468 | $3,850,595 | | Promissory Notes - related party | $590,000 | $290,000 | | Class A Common Stock subject to redemption | $57,164,965 | $56,621,690 | | Total Stockholders' Deficit | $(12,514,788) | $(12,171,136) | Condensed Statements of Operations | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Operating costs | $399,255 | $325,866 | | Interest earned on marketable securities | $744,782 | $2,719,339 | | Unrealized gain on marketable securities | $0 | $98,701 | | Net income | $199,623 | $1,910,886 | | Basic and diluted net income per share, Redeemable Class A Common Stock | $0.02 | $0.06 | Condensed Statements of Changes in Stockholders' Deficit | Metric | January 1, 2024 | March 31, 2024 | | :------------------------------------------------ | :-------------- | :------------- | | Balance – Total Stockholders' Deficit | $(12,171,136) | $(12,171,136) | | Remeasurement of Class A Common Stock to Redemption Value | $(543,275) | $(543,275) | | Net income | — | $199,623 | | Balance – Total Stockholders' Deficit | — | $(12,514,788) | Condensed Statements of Cash Flows | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(615,698) | $(423,114) | | Net cash provided by investing activities | $314,118 | $259,950 | | Net cash provided by financing activities | $300,000 | $0 | | Net Change in Cash | $(1,580) | $(163,164) | | Cash – End of period | $55,287 | $176,499 | Notes to Unaudited Condensed Financial Statements The notes provide detailed explanations for the financial statements, covering the company's nature as a blank check company, its IPO and Private Placement, significant accounting policies, related party transactions, commitments, and subsequent events including the liquidation of Trust Account investments and further extension of the Business Combination period NOTE 1. Description of Organization, Business Operations, Liquidity, and Risks and Uncertainties - The Company is a blank check company formed to effectuate a Business Combination, having completed its Initial Public Offering (IPO) on November 9, 2021, raising $250,000,000[20][22][23] - Following the IPO, $255,000,000 from the IPO and Private Placement proceeds was placed in a Trust Account, primarily for a Business Combination or stockholder redemptions[26] - Public Stockholders have the right to redeem their shares for a pro rata portion of the Trust Account, which was $10.85 per share as of March 31, 2024[28][35] - The Combination Period was extended to May 9, 2024, and further to November 9, 2024, with significant redemptions occurring in 2023 ($205.5 million) and 2024 ($49.95 million)[32][37][113][114] - As of March 31, 2024, the Company had a working capital deficit of $4,011,689 and faces substantial doubt about its ability to continue as a going concern if a Business Combination is not consummated by November 9, 2024[41][43] - The Inflation Reduction Act of 2022 introduced a 1% excise tax on stock repurchases, resulting in a $2,054,788 liability for the 2023 Redemptions[45][47] NOTE 2. Summary of Significant Accounting Policies - The financial statements are prepared in accordance with GAAP for interim financial information, with certain disclosures condensed or omitted per SEC rules[49] - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new accounting standards, which may affect comparability[51][52] - Marketable securities held in the Trust Account are classified as trading securities and measured at fair value (Level 1 hierarchy), with gains/losses included in interest income[56][109] - Class A Common Stock subject to possible redemption is classified as temporary equity and presented at redemption value, with changes recognized immediately[57][58] - The effective tax rate was 42.23% for Q1 2024, differing from the 21% statutory rate primarily due to a full valuation allowance on deferred tax assets[61] - Warrants are equity-classified based on specific terms and applicable guidance, as they meet the requirements for equity accounting treatment[70] NOTE 3. Initial Public Offering - The Company sold 25,000,000 Units in its Initial Public Offering at $10.00 per Unit, generating gross proceeds of $250,000,000[76] - Each Unit consisted of one Public Share and one-third of one Public Warrant, with each Public Warrant exercisable at $11.50 per whole share[76] NOTE 4. Private Placement - Simultaneously with the IPO, the Sponsor purchased 8,000,000 Private Placement Warrants at $1.50 each, generating $12,000,000[77] - Proceeds from the Private Placement were added to the Trust Account, and these warrants will expire worthless if a Business Combination is not completed[77] NOTE 5. Related Party Transactions - The Sponsor initially purchased 5,750,000 Founder Shares for $25,000, with some transferred to directors[78] - The Company pays the Sponsor up to $20,000 per month for administrative support services[83] - The Company issued two unsecured, non-interest-bearing Promissory Notes to the Sponsor, totaling $590,000 outstanding as of March 31, 2024[85][86][87] [NOTE 6. Commitments and Contingencies