IPO and Trust Account - The company completed its Initial Public Offering of 20,000,000 Units at $10.00 per Unit, generating gross proceeds of $200 million[151]. - Following the IPO, the company placed $200 million in a Trust Account, which will be invested in U.S. government treasury obligations or money market funds[156]. - On October 19, 2023, approximately $169.1 million was removed from the Trust Account due to redemptions by Public Shareholders, resulting in a redemption price of approximately $10.54 per share[171]. - During the 2024 EGM, Public Shareholders redeemed 2,713,143 Public Shares, resulting in approximately $29.6 million being removed from the Trust Account, equating to about $10.92 per share[175]. - The company will utilize up to $50,000 from accrued interest of the Trust Account for dissolution expenses if a Business Combination is not completed before the end of the Combination Period[202]. Financial Performance - For the three months ended September 30, 2024, the company reported a net loss of $4,568,210, with a loss from operations of $4,944,155, primarily due to operating expenses[180]. - For the nine months ended September 30, 2024, the company had a net loss of $4,205,940, with a loss from operations of $5,727,957[181]. - As of September 30, 2024, the company had a working capital deficit of $5,479,910 and only $33,544 in its operating bank account[185]. - The company drew $1,250,000 under the Polar Capital Investment, which was fair valued at $227,273 as of September 30, 2024[187]. - The company incurred $90,000 in administrative expenses for the nine months ended September 30, 2024, compared to $70,000 for the same period in 2023[192]. Business Combination and Regulations - The company expects to incur significant costs in pursuit of its initial Business Combination and cannot assure the success of this plan[166]. - The 2024 SPAC Rules adopted by the SEC may materially affect the company's ability to negotiate and complete its initial Business Combination[167]. - The company will only complete a Business Combination if it has net tangible assets of at least $5,000,001 at the time of closing[159]. - The company has until December 19, 2024, to complete its initial Business Combination, or it will cease operations and redeem Public Shares[165]. - The company has until December 19, 2024, or April 19, 2025, to consummate a Business Combination, with uncertainty regarding its ability to do so[190]. Shareholder Agreements and Equity - The company entered into 2024 Non-Redemption Agreements, with investors agreeing not to redeem 2,475,000 Public Shares, in exchange for 412,498 Founder Shares for the first five months and 82,498 Founder Shares per month thereafter[173]. - The Legacy Sponsor transferred 3,093,036 Founder Shares and 4,645,398 Private Placement Warrants to the New Sponsor as part of a Sponsor Handover[169]. - The estimated fair value of the 749,810 Class B Ordinary Shares attributed to investors in the 2023 Non-Redemption Agreements is $3,444,008, averaging $4.59 per share[203]. - The estimated fair value of the 742,490 Founder Shares in the 2024 Non-Redemption Agreements is $4,076,270, averaging approximately $5.49 per share[204]. - The company has waived rights to liquidating distributions from the Trust Account for Founder Shares if the initial Business Combination is not completed within the Combination Period[200]. Accounting and Reporting - The company does not have any critical accounting estimates that significantly affect its financial statements[205]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[207]. - The company accounts for its Ordinary Shares subject to possible redemption as temporary equity, measured at fair value[215]. - The company did not consider the effect of Warrants in the calculation of diluted income per share due to their contingent nature[211]. Underwriting and Advisory Fees - The underwriters of the Initial Public Offering were entitled to a cash underwriting discount of $4,000,000, with deferred fees of $7,000,000 payable upon completion of a Business Combination[195]. - The company has entered into financial advisory agreements with success fees ranging from $50,000 to $1,250,000, which were terminated in August 2023[197]. - The company entered into the Polar Subscription Agreement, with Polar agreeing to fund up to $1,500,000, of which $1,250,000 had been drawn as of September 30, 2024[199].
pass Digital Acquisition (CDAQ) - 2024 Q3 - Quarterly Report