pass Digital Acquisition (US:CDAQ)2025-05-14 20:10Financial Performance - For the three months ended March 31, 2025, the company reported a net loss of $483,071, with operating expenses of $490,342, including $30,000 in administrative expenses with a related party[205]. - For the three months ended March 31, 2024, the company had a net loss of $113,190, with operating expenses of $237,696, including $30,000 in administrative expenses with a related party[206]. - As of March 31, 2025, the company held cash of $1,403 and current liabilities of $6,747,220, indicating a significant financial obligation[189]. - As of March 31, 2025, the company had a working capital deficit of $2,572,223 and only $1,403 in its operating bank account[208]. - The company has faced various factors that may adversely affect its results of operations, including economic uncertainty and volatility in financial markets[207]. Initial Public Offering (IPO) - The company completed its Initial Public Offering (IPO) on October 19, 2021, selling 20,000,000 Units at $10.00 per Unit, generating gross proceeds of $200 million[177]. - The underwriters of the Initial Public Offering received a cash underwriting discount of 2.00% of the gross proceeds, amounting to $4,000,000[223]. Redemptions - Public Shareholders redeemed 16,045,860 Public Shares for approximately $169.1 million at a redemption price of $10.54 per share during the 2023 Redemptions[197]. - In the 2024 Redemptions, Public Shareholders redeemed 2,713,143 Public Shares for approximately $29.6 million at a redemption price of $10.92 per share[198]. - Approximately $26.7 million was removed from the Trust Account during the 2025 Redemptions, with a redemption price of approximately $11.25 per share[199]. - The 2025 EGM approved an extension of the Combination Period to April 19, 2026, and eliminated the Redemption Limitation, allowing for greater flexibility in future redemptions[199]. Business Combination - A Business Combination Agreement was entered into with EEW on September 5, 2024, marking a significant step in the company's strategic plans[201]. - The company has until April 19, 2026, to consummate a Business Combination, or it will face mandatory liquidation[218]. - 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[231]. Financing and Debt - The company has drawn an additional $85,518 on the 2024 Promissory Note, bringing the total outstanding balance to $1,466,537[190]. - The company has borrowed an aggregate of $125,000 under the 2021 Promissory Note as of March 31, 2025[212]. - The company has $1,381,019 outstanding under the 2024 Promissory Note as of March 31, 2025[213]. - The company entered into a Polar Subscription Agreement on September 6, 2023, with a commitment of up to $1,500,000, of which $1,250,000 had been drawn as of March 31, 2025[215]. Shareholder Agreements - The company entered into 2023 Non-Redemption Agreements, securing commitments from investors not to redeem 4,998,734 Public Shares, in exchange for 749,810 Founder Shares valued at approximately $3,444,008 or $4.59 per share[228][229]. - In 2024, the company established Non-Redemption Agreements for 2,475,000 Public Shares, with the Sponsor agreeing to transfer 412,498 Founder Shares for the first five months of the extension period, and 82,498 Founder Shares for each additional month[230]. - The estimated fair value of the 742,490 Founder Shares under the 2024 Non-Redemption Agreements is approximately $4,139,382 and $4,028,008, translating to about $5.58 and $5.43 per share as of March 31, 2025, and December 31, 2024, respectively[232]. Accounting and Reporting - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements applicable to other public companies[234]. - The company has not opted out of the extended transition period under the JOBS Act, allowing it to adopt new or revised financial accounting standards at the same time as private companies[235]. - The company accounts for its Ordinary Shares subject to possible redemption in accordance with ASC 480, classifying them as temporary equity due to certain redemption rights[242]. - The company did not consider the effect of Warrants in the calculation of diluted loss per share, as their exercise is contingent upon future events[239]. - The company assesses Warrants as either equity-classified or liability-classified instruments based on specific terms and applicable guidance, impacting their financial reporting[240][241]. - The preparation of financial statements requires management to make estimates and judgments that affect reported amounts of assets, liabilities, revenues, and expenses[233][236].