Arisz Acquisition (ARIZ) - 2022 Q4 - Annual Report

Part I Business Arisz Acquisition Corp. is a SPAC targeting the healthcare industry, which completed its IPO and entered a merger agreement with BitFuFu Introduction and IPO Arisz Acquisition Corp. is a SPAC focused on healthcare, which completed its IPO on November 22, 2021, raising $69 million placed into a trust account - The company is a blank check company targeting the healthcare industry for an initial business combination[14] - The company has 15 months from the IPO closing (extendable to 18 months) to complete an initial business combination, after which it must liquidate[19] IPO and Trust Account Details | Metric | Value | | :--- | :--- | | IPO Date | November 22, 2021 | | Units Offered (incl. over-allotment) | 6,900,000 | | Price per Unit | $10.00 | | Total Gross Proceeds from Units | $69,000,000 | | Amount Placed in Trust Account | $69,000,000 | Merger Agreement with BitFuFu Arisz entered a merger agreement with BitFuFu on January 21, 2022, later amended to extend the deadline, provide a $2.22 million loan, and establish breakup fees - Arisz entered into a definitive merger agreement with Finfront Holding Company ("BitFuFu") on January 21, 2022[21] - An amendment on October 10, 2022, extended the merger's outside date to August 1, 2023[22] - BitFuFu agreed to provide a $2.22 million loan to Arisz to fund the business combination extension and for working capital, evidenced by a promissory note[22][24] - The amended agreement includes a $4 million breakup fee payable by BitFuFu and a $5 million breakup fee payable by Arisz under specific termination scenarios[22] Management and Sponsor The company is led by CEO Echo Hindle-Yang and CFO Marc Estigarribia, benefiting from its sponsor's life sciences expertise and a board with diverse experience - The company's sponsor is an affiliate of M.S.Q. Ventures Inc (MSQ), an advisory firm with deep expertise in the life sciences industry[28] - The management team and board possess extensive experience in healthcare, finance, and corporate strategy[30][31][33] Competition and Employees Arisz faces intense competition from other SPACs and private equity firms, operating with two officers and no full-time employees prior to a business combination - The company faces significant competition from other SPACs and private equity funds, which may have superior resources[38] - The company has two officers and no full-time employees prior to a business combination[39] Risk Factors As a smaller reporting company, Arisz Acquisition Corp. is not required to provide disclosures under this item - The company is not required to disclose risk factors as it qualifies as a smaller reporting company[40] Unresolved Staff Comments The company reports no unresolved staff comments - Not applicable[40] Properties The company's executive offices are in New York, NY, with a $10,000 monthly fee paid to its sponsor for administrative support - The company pays its sponsor $10,000 per month for office space and administrative support[41] Legal Proceedings The company is not currently a party to any material litigation or other legal proceedings - There are no material legal proceedings against the company[42] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[42] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq, with 8,901,389 common shares outstanding as of December 6, 2022, and no dividends paid or intended prior to a business combination - The company's securities are listed on Nasdaq under symbols ARIZU, ARIZ, ARIZR, and ARIZW[44] - As of December 6, 2022, there were 8,901,389 shares of common stock outstanding[45] - No cash dividends have been paid to date, and none are intended prior to a business combination[46] Management's Discussion and Analysis of Financial Condition and Results of Operations This section details the company's financial condition and operational results, reporting a $359,608 net loss for FY2022 and highlighting going concern uncertainty due to the business combination deadline Overview The company is pursuing a business combination with BitFuFu, having extended its deadline to February 17, 2023, by depositing $690,000 into its trust account - The company is pursuing a business combination with BitFuFu, with an amended merger agreement in place[49][54] - On November 9, 2022, the company deposited $690,000 into the Trust Account to extend its business combination deadline by three months to February 17, 2023[56] Results of Operations For the fiscal year ended September 30, 2022, Arisz reported a net loss of $359,608, primarily from operating and tax expenses offset by trust account interest Fiscal Year 2022 Financial Results | Metric | Amount (USD) | | :--- | :--- | | General & Administrative Expenses | $544,157 | | Franchise & Income Tax Expense | $102,251 | | Loss from Operations | ($597,351) | | Interest Earned on Securities | $286,800 | | Net Loss | ($359,608) | Liquidity and Going Concern As of September 30, 2022, the company held $173,789 cash outside the trust account and $69.3 million in marketable securities, with management noting substantial doubt about its going concern ability - As of September 30, 2022, cash outside the Trust Account was $173,789, and the Trust Account held marketable securities valued at $69,286,800[62][63] - Management has concluded there is substantial doubt about the Company's ability to continue as a going concern due to the risk of not completing a Business Combination within the required timeframe[65] Critical Accounting Policies The company's critical accounting policies include classifying redeemable common stock as temporary equity, using the two-class method for EPS, and assessing warrant classification - Common stock subject to possible redemption is classified as temporary equity and measured at its redemption value at the end of each reporting period[70] - Net income (loss) per share is calculated using the two-class method, separating redeemable and non-redeemable shares[71] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Arisz Acquisition Corp. is not required to provide disclosures under this item - The company is not required to make disclosures under this item as it is a smaller reporting company[78] Controls and Procedures Management concluded disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting - The company's Certifying Officers concluded that disclosure controls and procedures were effective as of September 30, 2022[79] - No material changes were made to the internal control over financial reporting in the last quarter[82] Other Information This section reiterates details of the BitFuFu Merger Agreement and its amendments, including a $2.0 million backstop agreement executed on October 13, 2022 - This section provides a summary of the Merger Agreement with BitFuFu and its amendments, which are detailed elsewhere in the report[83][84] - A new backstop agreement was executed on October 13, 2022, for a subscription of $2.0 million worth of shares[88] Part III Directors, Executive Officers and Corporate Governance The company is led by CEO Echo Hindle-Yang and CFO Marc Estigarribia, with a five-member board including independent directors and established audit and compensation committees - The board of directors has five members, with three deemed independent under Nasdaq rules[97] - An Audit Committee and a Compensation Committee have been established, each comprising three independent directors[104][109] - The company acknowledges potential conflicts of interest, as officers and directors are not required to commit their full time to the company's affairs[116] Executive Compensation No executive officers have received cash compensation, while the sponsor receives a $10,000 monthly administrative fee, and officers are reimbursed for expenses - No executive officers have received cash compensation for services rendered[124] - The Sponsor receives a $10,000 per month administrative fee, while officers and directors are reimbursed for out-of-pocket expenses[124] Security Ownership of Certain Beneficial Owners and Management As of December 6, 2022, officers and directors beneficially owned 20.0% of common stock, with CEO Echo Hindle-Yang as the largest owner through the sponsor Beneficial Ownership as of December 6, 2022 | Beneficial Owner | Percentage of Outstanding Shares | | :--- | :--- | | Echo Hindle-Yang (CEO) | 22.3% | | Arisz Investment LLC (Sponsor) | 21.8% | | All officers and directors as a group | 20.0% | | Saba Capital Management, L.P. | 5.3% | | Shaolin Capital Management LLC | 5.9% | | Mizuho Financial Group, Inc. | 5.7% | Certain Relationships and Related Transactions, and Director Independence This section details related party transactions, including the sponsor's purchase of founder shares, a repaid $300,000 promissory note, and potential working capital loans - The Sponsor purchased 1,725,000 founder shares for an aggregate price of $25,000[133] - The Sponsor provided a $300,000 unsecured, non-interest-bearing promissory note for IPO costs, which has been repaid[135] - The Sponsor or its affiliates may provide up to $1,500,000 in Working Capital Loans, which can be converted into units at $10.00 per unit upon a business combination[136] Principal Accountant Fees and Services The company paid Friedman, LLP approximately $85,000 in audit fees for FY2022, with all services pre-approved by the audit committee Accountant Fees (Friedman, LLP) | Fee Category | FY Ended Sep 30, 2022 | Period Ended Sep 30, 2021 | | :--- | :--- | :--- | | Audit Fees | ~$85,000 | $0 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | Part IV Exhibits and Financial Statement Schedules This section lists documents filed as part of the Form 10-K, including financial statements and various exhibits like the Merger Agreement - This section provides an index to the company's financial statements and lists all exhibits filed with the report[152][154] Financial Statements Report of Independent Registered Public Accounting Firm Marcum LLP's auditor report for FY2022 expresses a fair presentation opinion but highlights substantial doubt about the company's going concern ability - The auditor's report includes a "Going Concern" paragraph, citing substantial doubt about the company's ability to continue operations[165][172] Financial Statements Tables The financial statements detail the company's position as of September 30, 2022, showing $69.5 million in assets, $2.8 million in liabilities, and a $359,608 net loss for the fiscal year Balance Sheet Summary (as of Sep 30, 2022) | Account | Amount (USD) | | :--- | :--- | | Cash | $173,789 | | Investments held in Trust Account | $69,286,800 | | Total Assets | $69,477,425 | | Total Current Liabilities | $198,920 | | Deferred underwriting fee payable | $2,587,500 | | Total Liabilities | $2,786,420 | | Common stock subject to possible redemption | $69,286,800 | | Total Stockholders' Deficit | ($2,595,795) | Statement of Operations Summary (Year ended Sep 30, 2022) | Account | Amount (USD) | | :--- | :--- | | Loss from Operations | ($597,351) | | Interest earned on investment | $286,800 | | Income taxes provision | $49,057 | | Net Loss | ($359,608) | Notes to Financial Statements The notes provide additional detail on financial statements, covering the BitFuFu business combination, IPO terms, related party transactions, and the going concern consideration - The company has until 15 months from the IPO (extendable to 18 months) to complete a business combination, or it will be forced to liquidate[205] - The Inflation Reduction Act of 2022 introduced a 1% excise tax on stock repurchases after Dec 31, 2022, which may apply to redemptions in connection with a business combination[216][217] - Subsequent to the fiscal year-end, the company received the first $740,000 installment of its loan from BitFuFu and deposited $690,000 into the trust account to extend its deadline to February 17, 2023[287]