FTAC Emerald Acquisition Corp.(FLD) - 2023 Q1 - Quarterly Report

Part I Interim Financial Statements FTAC Emerald Acquisition Corp. reported $1.27 million net income for Q1 2023, driven by increased interest income, with $258.2 million total assets and a going concern uncertainty Condensed Balance Sheets As of March 31, 2023, total assets were $258.2 million, primarily Trust Account investments, with $11.7 million liabilities and a $9.3 million stockholders' deficit Condensed Balance Sheet Data (Unaudited) | Account | March 31, 2023 ($) | December 31, 2022 ($) | | :--- | :--- | :--- | | Assets | | | | Cash | $67,077 | $72,753 | | Investments held in Trust Account | $256,827,790 | $254,251,750 | | TOTAL ASSETS | $258,238,040 | $255,664,716 | | Liabilities & Equity | | | | Total current liabilities | $1,797,473 | $492,008 | | Total liabilities | $11,656,743 | $10,351,278 | | Class A common stock subject to possible redemption | $255,862,610 | $253,814,255 | | Total stockholders' deficit | ($9,281,313) | ($8,500,817) | Condensed Statements of Operations The company reported $1.27 million net income for Q1 2023, a significant turnaround from a prior-year loss, primarily due to $2.7 million in interest income Condensed Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Loss from operations | ($872,897) | ($489,504) | | Interest income earned on investments | $2,696,526 | $25,241 | | Provision for income taxes | $555,770 | $0 | | Net income (loss) | $1,267,859 | ($464,263) | | Basic and diluted net income (loss) per share | $0.04 | ($0.01) | Condensed Statements of Cash Flows Net cash used in operating activities was $876,162 for Q1 2023, with investing activities providing $120,486 and financing activities providing $750,000 Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($876,162) | ($339,979) | | Net cash provided by (used in) investing activities | $120,486 | ($28,980,354) | | Net cash provided by financing activities | $750,000 | $28,980,362 | | Net Change in Cash | ($5,676) | ($339,971) | Notes to Condensed Financial Statements The notes detail the company's blank check company status, going concern uncertainty due to the September 20, 2023 deadline, and significant related-party transactions - The Company is a blank check company formed to effect a Business Combination and has not commenced any operations. All activity relates to its formation, IPO, and search for a target[15][16] - Management has identified a mandatory liquidation if a Business Combination is not consummated by September 20, 2023, which raises substantial doubt about the Company's ability to continue as a going concern[26] - On January 13, 2023, the Sponsor provided a Promissory Note for up to $1,500,000 to fund working capital. As of March 31, 2023, $750,000 was outstanding[59][60] - The company has a commitment for a deferred underwriting discount of $8,704,270, payable upon completion of an initial Business Combination[65] - Subsequent to the quarter end, on April 24, 2023, the Company made an additional draw of $125,000 on the Working Capital Loans[80] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check company status, $1.27 million net income in Q1 2023, and critical liquidity concerns with a going concern risk - The company is a blank check company with activities limited to organizational tasks and searching for a Business Combination. It generates non-operating interest income from funds held in the Trust Account[84][86] Quarterly Results Comparison | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :--- | :--- | :--- | | Net income (loss) | $1,267,859 | ($464,263) | | Key Driver | Interest income of $2,696,526 | Interest income of $25,241 | - As of March 31, 2023, the company had only $67,077 in cash held outside of trust and a working capital deficit of $577,043. It relies on Working Capital Loans from its Sponsor, with $750,000 outstanding[92][93] - Management reiterates that there is substantial doubt about the company's ability to continue as a going concern due to the September 20, 2023 deadline to consummate a Business Combination, which would otherwise trigger mandatory liquidation[97] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company is a smaller reporting company - Disclosure about market risk is not required for smaller reporting companies[111] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control - Based on an evaluation as of March 31, 2023, the company's Certifying Officers concluded that disclosure controls and procedures were effective[112] - No changes in internal control over financial reporting occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[115] Part II Legal Proceedings The company reports no legal proceedings - None[117] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - As of the date of this report, there have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K[118] Unregistered Sales of Equity Securities and Use of Proceeds This section details the $251.2 million placed in the Trust Account from IPO and private placement proceeds, covering offering costs - Simultaneously with the IPO, the Sponsor purchased 890,000 Private Placement Units at $10.00 per unit. An additional 86,081 units were purchased in connection with the over-allotment exercise, generating total proceeds of $9,760,810 from these private sales[120][122] - Of the gross proceeds from the public and private sales, $251,180,354 was placed in the Trust Account[123] - Total offering costs included $4,973,868 in immediate underwriting discounts and commissions, with an additional $8,704,270 deferred until a business combination is completed[124] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[125] Mine Safety Disclosures The company reports no mine safety disclosures - None[125] Other Information The company reports no other information - None[125] Exhibits This section lists the exhibits filed with the Quarterly Report, including officer certifications and Inline XBRL data files - The report includes exhibits such as CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)[127]