ARYA Sciences Acquisition IV(ARYD) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements This section presents ARYA Sciences Acquisition Corp IV's unaudited condensed financial statements, detailing its SPAC status, financial position, and the impact of a significant deferred underwriting commission waiver Condensed Balance Sheets As of September 30, 2022, total assets were approximately $150.6 million, primarily Trust Account investments, with liabilities at $8.6 million and a shareholders' deficit of $(8.4) million Condensed Balance Sheet Data (Unaudited) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $150,621,938 | $150,422,375 | | Investments held in Trust Account | $150,447,906 | $149,552,336 | | Total Liabilities | $8,643,363 | $11,217,682 | | Deferred underwriting commissions | $2,616,250 | $5,232,500 | | Total shareholders' deficit | $(8,369,331) | $(10,295,307) | - As of September 30, 2022, 14,950,000 Class A ordinary shares were subject to possible redemption at a value of $10.06 per share, totaling $150,347,906[8] Unaudited Condensed Statements of Operations The company reported a net income of $3.2 million for Q3 2022, primarily driven by a $2.6 million gain from deferred underwriting commission settlement and unrealized investment gains Statements of Operations Highlights | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $3,181,072 | $(5,093,380) | $2,773,882 | $(5,466,059) | | Gain from settlement of deferred underwriting commissions | $2,616,250 | - | $2,616,250 | - | | Unrealized gain on investments | $745,227 | $12,523 | $895,570 | $32,334 | | Basic and Diluted Net Income (Loss) per Share (Class A & B) | $0.17 | $(0.27) | $0.14 | $(0.35) | Unaudited Condensed Statements of Changes in Shareholders' Equity (Deficit) The shareholders' deficit improved from $(10.3) million to $(8.4) million during the nine months ended September 30, 2022, driven by net income - The accumulated deficit decreased from $(10,295,731) at the beginning of the year to $(8,369,755) as of September 30, 2022, driven by a net income of $3,181,072 in the third quarter[14] Unaudited Condensed Statements of Cash Flows For the nine months ended September 30, 2022, the company used $433,110 in operating cash, had no investing cash flows, and ended the period with $23,132 in cash Cash Flow Summary (Nine Months Ended) | Cash Flow Activity | Sep 30, 2022 | Sep 30, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(433,110) | $(945,751) | | Net cash used in investing activities | - | $(149,500,000) | | Net cash (used in) provided by financing activities | $(45,000) | $151,069,388 | | Cash - end of the period | $23,132 | $623,637 | Notes to Unaudited Condensed Financial Statements The notes detail the company's SPAC status, March 2, 2023 business combination deadline, going concern issue, a $2.6 million gain from a deferred commission waiver, and a new $120,000 convertible promissory note - The company was formed to effect a Business Combination and must complete one by March 2, 2023, or it will be required to liquidate and dissolve[20][30][31] - Management determined that the company's working capital deficit and liquidity conditions raise substantial doubt about its ability to continue as a going concern[37] - On August 8, 2022, an underwriter waived its right to its 50% share of deferred underwriting commissions, resulting in a gain of approximately $2.6 million for the company[78][22] - Subsequent to the quarter end, on November 7, 2022, the company issued an unsecured convertible promissory note to its Sponsor, allowing it to borrow up to $120,000 for working capital[93] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's financial results, attributing Q3 2022 net income to a one-time gain from a deferred underwriting commission waiver, and highlights significant liquidity issues and the approaching business combination deadline - The company is a blank check company with no operating history, formed for the purpose of effecting a Business Combination[101] - Net income for Q3 2022 was approximately $3.2 million, primarily due to a ~$2.6 million gain from the settlement of deferred underwriting commissions and ~$745,000 in unrealized gains on investments[111] - The company has a working capital deficit of approximately $5.9 million and limited cash ($23,000) as of September 30, 2022, raising substantial doubt about its ability to continue as a going concern[115][117] - The company has until March 2, 2023, to consummate a Business Combination, or it will be forced to liquidate[106][117] Quantitative and Qualitative Disclosures About Market Risk The company is exempt from providing this information as it qualifies as a smaller reporting company under Rule 12b-2 of the Exchange Act - As a smaller reporting company, the registrant is not required to provide the information otherwise required under this item[133] Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2022, with a material weakness remediated by June 30, 2022 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[136] - A material weakness in internal control over financial reporting identified in 2021 was remediated as of June 30, 2022[137] PART II. OTHER INFORMATION Legal Proceedings The company reports that there are no legal proceedings against it - None[139] Risk Factors This section highlights a new risk factor concerning proposed SEC rules for SPACs, which could increase costs and time for business combination completion - On March 30, 2022, the SEC issued proposed rules related to SPACs, which if adopted, may materially increase the costs and time required to negotiate and complete an initial business combination[142] - Other than the new risk factor regarding potential regulatory changes, there have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K[140] Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities This section details the sale of 499,000 Private Placement Shares to the Sponsor, the placement of $149.5 million IPO proceeds into the Trust Account, and a subsequent $120,000 convertible promissory note - The sponsor purchased 499,000 Private Placement Shares at $10.00 per share, generating gross proceeds of approximately $5.0 million[143] - Of the gross proceeds from the IPO, $149,500,000 was placed in the Trust Account[145] - On November 7, 2022, the Company issued a convertible promissory note to the Sponsor, allowing it to borrow $120,000 for general corporate purposes[144] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[148] Mine Safety Disclosures This item is not applicable to the company - Not applicable[148] Other Information The company reports no other information - None[148] Exhibits This section lists all exhibits filed with or incorporated by reference into the Form 10-Q report, including key organizational and financial agreements - The report includes a list of exhibits filed, such as the Amended and Restated Memorandum and Articles of Association, Investment Management Trust Agreement, and a Convertible Promissory Note dated November 7, 2022[150]