A SPAC II Acquisition (ASCB) - 2023 Q1 - Quarterly Report

Filing Information This section details the company's filing status, classification, and share capital as of the reporting period - A SPAC II Acquisition Corp. filed its Quarterly Report on Form 10-Q for the period ended March 31, 2023, identifying as a British Virgin Islands entity[1][2] - The company is classified as a non-accelerated filer, smaller reporting company, and an emerging growth company, and has complied with SEC filing requirements[3][5] Shares Outstanding as of May 12, 2023 | Share Class | Number of Shares | | :---------------------- | :--------------- | | Class A Ordinary Shares | 20,300,000 | | Class B Ordinary Shares | 5,000,000 | Cautionary Note Concerning Forward-Looking Statements This section provides a cautionary note regarding forward-looking statements and the inherent risks and uncertainties that may cause actual results to differ materially - This report includes forward-looking statements that involve risks and uncertainties, which could cause actual results to differ materially from those projected[8] - Readers are directed to the Company's Annual Report on Form 10-K and initial public offering prospectus for important factors that could cause actual results to differ[8] Part I - Financial Information This part presents the company's unaudited condensed financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Unaudited Condensed Financial Statements This section provides the company's unaudited condensed financial statements, including balance sheets, statements of operations, changes in shareholders' equity (deficit), and cash flows, along with detailed notes explaining the financial figures and significant accounting policies for the three months ended March 31, 2023, and 2022 Unaudited Condensed Balance Sheets This section presents the company's financial position, including assets, liabilities, and shareholders' deficit, as of March 31, 2023, and December 31, 2022 Condensed Balance Sheet Highlights | Metric | March 31, 2023 (Unaudited) | December 31, 2022 | | :-------------------------------- | :------------------------- | :---------------- | | Cash | $923,665 | $1,063,837 | | Investments held in Trust Account | $208,545,770 | $206,356,227 | | Total Assets | $209,542,514 | $207,504,476 | | Total Liabilities | $7,057,310 | $7,021,316 | | Total Shareholders' Deficit | $(6,060,566) | $(5,873,067) | Unaudited Condensed Statement of Operations This section details the company's revenues, expenses, and net income or loss for the three months ended March 31, 2023, and 2022 Condensed Statement of Operations Highlights | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | General and administrative expenses | $197,239 | $20 | | Loss from operations | $(197,239) | $(20) | | Interest income | $2,199,283 | $0 | | Net income (loss) | $2,002,044 | $(20) | | Basic and diluted net income (loss) per share (redeemable shares) | $0.10 | $0 | | Basic and diluted net loss per share (non-redeemable shares) | $(0.01) | $(0.00) | - The company reported a net income of $2,002,044 for the three months ended March 31, 2023, a significant increase from a net loss of $20 in the prior year, primarily due to $2,199,283 in interest income from the Trust Account[15] Unaudited Condensed Statement of Changes in Shareholders' Equity (Deficit) This section outlines the changes in the company's shareholders' equity or deficit for the three months ended March 31, 2023, and 2022 Changes in Shareholders' Equity (Deficit) for Three Months Ended March 31, 2023 | Metric | Amount ($) |\n| :------------------------------------------------------------------ | :--------------- | | Balance – As of January 1, 2023 | (5,873,067) | | Accretion of Class A ordinary shares to redemption value | (2,189,543) | | Net Income | 2,002,044 | | Balance – March 31, 2023 | (6,060,566) | Changes in Shareholders' Equity (Deficit) for Three Months Ended March 31, 2022 | Metric | Amount ($) |\n| :------------------------------------------------------------------ | :--------------- | | Balance – As of January 1, 2022 | 22,240 | | Net loss | (20) | | Balance – March 31, 2022 | 22,220 | - The total shareholders' deficit increased from $(5,873,067) at January 1, 2023, to $(6,060,566) at March 31, 2023, primarily due to the accretion of Class A ordinary shares to redemption value, partially offset by net income[18] Unaudited Condensed Statement of Cash Flows This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023, and 2022 Condensed Statement of Cash Flows Highlights | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) | $2,002,044 | $(20) | | Interest earned in trust account | $(2,189,543) | $0 | | Net cash used in operating activities | $(140,172) | $0 | | Cash, beginning of the period | $1,063,837 | $0 | | Cash, end of the period | $923,665 | $0 | - Net cash used in operating activities was $140,172 for the three months ended March 31, 2023, a change from $0 in the prior year, primarily due to the adjustment for interest earned in the trust account[22] Notes to Unaudited Condensed Financial Statements This section provides detailed explanations of the company's financial figures and significant accounting policies, including the basis of presentation, emerging growth company status, and accounting for various financial instruments and transactions Note 1 – Description of Organization and Business Operation A SPAC II Acquisition Corp. was incorporated on June 28, 2021, as a blank check company to effect a business combination. The company completed its IPO on May 5, 2022, raising $200 million, with $203.5 million placed in a Trust Account. It has not commenced operations and generates non-operating income from interest on Trust Account investments. Management has identified substantial doubt about the company's ability to continue as a going concern due to the need to complete a Business Combination within the Combination Period - The Company was incorporated on June 28, 2021, as a blank check company to pursue a business combination, and has not commenced any operations as of March 31, 2023[24][25] - The IPO was consummated on May 5, 2022, raising $200,000,000 from 20,000,000 units, with $203,500,000 placed in a Trust Account[26][29] - As of March 31, 2023, the Company had cash of $923,665 outside the Trust Account and a working capital of $939,434[27][37] - Management has determined that conditions raise substantial doubt about the Company's ability to continue as a going concern if a Business Combination is not completed by August 5, 2023 (or February 5, 2024 if extended)[38] Note 2 – Summary of Significant Accounting Policies This note outlines the significant accounting policies, including the basis of presentation in conformity with GAAP, the company's status as an emerging growth company, and its accounting treatment for investments in the Trust Account, cash and cash equivalents, Class A ordinary shares subject to redemption, fair value of financial instruments, warrant instruments, net income (loss) per share, income taxes, and recent accounting pronouncements - The financial statements are presented in conformity with GAAP and SEC rules, with interim results not necessarily indicative of future periods[41] - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new accounting standards[42] - Class A ordinary shares subject to possible redemption are classified as temporary equity and measured at redemption value, with changes recognized immediately[48] - Warrants are accounted for as equity-classified instruments, and net income (loss) per share is presented using the two-class method[50][51] Note 3 – Initial Public Offering This note details the IPO on May 5, 2022, where 20,000,000 units were sold at $10.00 each, comprising Class A Ordinary Shares, Public Warrants, and Public Rights. It also explains the accounting treatment for Class A Ordinary Shares subject to possible redemption, which are classified as temporary equity and remeasured to redemption value - The IPO on May 5, 2022, involved the sale of 20,000,000 Units at $10.00 per Unit, each consisting of one Class A Ordinary Share, one-half of one redeemable warrant, and one right to receive one-tenth of one Class A ordinary share[63] - Class A Ordinary Shares subject to possible redemption are classified as temporary equity and remeasured to their redemption value immediately as changes occur[64] Class A Ordinary Shares Subject to Possible Redemption Reconciliation | Metric | Amount ($) |\n| :------------------------------------------------------------------ | :----------- | | Gross proceeds from IPO | $200,000,000 | | Less: Proceeds allocated to Public Warrants and Public Rights | (15,500,000) | | Less: Proceeds allocate to over-allotment liability | (67,450) | | Less: Class A ordinary shares issuance cost | (12,109,127) | | Plus: Remeasurement of carrying value to redemption value (prior) | 34,032,804 | | Class A Ordinary shares subject to possible redemption - Dec 31, 2022 | 206,356,227 | | Plus: Remeasurement of carrying value to redemption value (current) | 2,189,543 | | Class A Ordinary shares subject to possible redemption - Mar 31, 2023 | $208,545,770 | Note 4 – Private Placement Warrants This note describes the private placement of 8,966,000 Private Placement Warrants to the Sponsor at $1.00 each, generating $8,966,000. These warrants are similar to Public Warrants but have specific registration rights and transfer restrictions, and their proceeds were added to the Trust Account - The Sponsor purchased 8,966,000 Private Placement Warrants at $1.00 per warrant, generating $8,966,000, simultaneously with the IPO closing[67] - Private Placement Warrants are identical to Public Warrants except for certain registration rights and transfer restrictions[67] - Proceeds from the Private Placement Warrants were added to the Trust Account and will be used to fund the redemption of Public Shares if a Business Combination is not completed[67] Note 5 – Related Party Transactions This note details related party transactions, including the Sponsor's purchase and forfeiture of Founder Shares, the terms of their conversion to Class A shares, and transfer restrictions. It also covers a promissory note from the Sponsor for IPO expenses, which was repaid, and potential future Working Capital Loans from related parties - The Sponsor purchased 5,750,000 Founder Shares (Class B Ordinary Shares) for $25,000, with 318,750 shares forfeited on May 6, 2022, resulting in 5,000,000 Class B Ordinary Shares outstanding as of March 31, 2023[68][69][81] - Founder Shares are subject to transfer restrictions until six months after the business combination or until certain stock price conditions are met[70] - A $400,000 non-interest bearing promissory note from the Sponsor to cover IPO expenses was repaid on May 10, 2022, with no outstanding amount as of March 31, 2023[71] - Working Capital Loans from related parties may be used to finance transaction costs, repayable from Trust Account proceeds upon business combination or convertible into warrants[72] Note 6 – Commitments & Contingencies This note outlines the company's commitments and contingencies, including registration rights for holders of Founder Shares, Private Placement Warrants, and other securities, requiring the company to register these for resale. It also details the underwriting agreement, including a deferred commission of $7,000,000 payable upon the closing of a Business Combination - Holders of Founder Shares, Private Placement Warrants, and any warrants from Working Capital Loans are entitled to registration rights[73][120] - A deferred underwriting commission of $7,000,000 is payable to the underwriters upon the closing of a Business Combination from the Trust Account[75][121] - The Company issued 300,000 Class A ordinary shares to Maxim Group LLC as representative compensation, valued at approximately $2,202,589, subject to a 180-day lock-up period[28][76][78] Note 7—Shareholders' Equity This note details the company's authorized and outstanding share capital, including preference shares (none issued), Class A Ordinary Shares (20,300,000 outstanding, including 20,000,000 subject to redemption), and Class B Ordinary Shares (5,000,000 outstanding). It also describes the terms of warrants and rights, including exercise prices, redemption conditions, and adjustments - The Company is authorized to issue 1,000,000 preference shares (none issued) and 500,000,000 Class A Ordinary Shares, with 20,300,000 Class A shares outstanding as of March 31, 2023 (including 20,000,000 subject to redemption)[79] - 50,000,000 Class B Ordinary Shares are authorized, with 5,000,000 outstanding as of March 31, 2023, which automatically convert to Class A shares upon initial Business Combination[81][82] - Each whole warrant entitles the holder to purchase one Class A ordinary share at $11.50, exercisable after a Business Combination, and the Company may redeem warrants if the Class A share price exceeds $16.50[83][84] - Each Public Right automatically converts to one-tenth (1/10) of one Class A ordinary share upon consummation of a Business Combination[90] Note 8 – Fair Value Measurements This note explains the fair value hierarchy (Level 1, 2, 3) used to classify assets and liabilities. It reports that marketable securities held in the Trust Account are classified as Level 1, while representative shares granted to Maxim Group LLC were valued as Level 3 using models like Monte Carlo and PWERM - The Company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on observable and unobservable inputs[93][94] Fair Value of Marketable Securities Held in Trust Account | Asset | March 31, 2023 | December 31, 2022 | | :---------------------------------- | :------------- | :---------------- | | Marketable securities held in Trust Account | $208,545,770 | $206,356,227 | | Fair Value Hierarchy | Level 1 | Level 1 | Fair Value of Equity Instrument (Non-recurring) | Equity Instrument | May 5, 2022 |\n| :-------------------- | :----------- | | Representative shares | $2,202,589 | | Fair Value Hierarchy | Level 3 | Note 9 – Subsequent Events The company evaluated subsequent events and transactions up to the financial statement issuance date and identified no events requiring adjustment or disclosure - No subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the financial statement issuance date[98] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results, including an overview of its blank check nature, analysis of its limited operations and non-operating income, liquidity and capital resources, off-balance sheet arrangements, contractual obligations, critical accounting policies, and recent accounting standards Overview This section provides a general introduction to the company's nature as a blank check company and its intended use of proceeds - A SPAC II Acquisition Corp. is a blank check company formed to effect a business combination, with no specific target identified yet[102] - The company intends to use proceeds from its IPO and private placement, along with potential additional securities or debt, to fund its initial Business Combination[102] Results of Operations This section analyzes the company's financial performance, highlighting its non-operating income and limited operational activities - The company has not engaged in operating activities or generated operating revenues since inception, with activities limited to organizational efforts and seeking a business combination target[103] Net Income (Loss) Comparison | Period | Net Income (Loss) |\n| :------------------------------------ | :---------------- | | Three months ended March 31, 2023 | $2,002,044 | | Three months ended March 31, 2022 | $(20) | - Net income for the three months ended March 31, 2023, was $2,002,044, primarily from $2,199,283 in interest income on Trust Account investments, offsetting $197,239 in general and administrative expenses[105] Liquidity and Capital Resources This section discusses the company's cash position, funding sources from its IPO and private placement, and its ability to continue as a going concern - The company consummated its IPO on May 5, 2022, raising $200,000,000 from units and $8,966,000 from Private Placement Warrants[106][107] - A total of $203,500,000 from IPO and Private Placement proceeds was deposited into a Trust Account for the benefit of public shareholders[108] Cash and Trust Account Balances (March 31, 2023) | Metric | Amount ($) |\n| :------------------------------------ | :----------- | | Marketable securities in Trust Account | $208,545,770 | | Cash outside Trust Account | $923,665 | | Working Capital | $939,434 | - Management has identified substantial doubt about the company's ability to continue as a going concern if a Business Combination is not completed within the Combination Period (by August 5, 2023, or February 5, 2024 if extended)[115][116] Off-Balance Sheet Financing Arrangements This section confirms the absence of any off-balance sheet arrangements as of the reporting date - As of March 31, 2023, the company had no off-balance sheet arrangements, including obligations, assets, or liabilities[117] Contractual Obligations This section outlines the company's key contractual commitments, including registration rights and deferred underwriting fees - The company had no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities as of March 31, 2023, other than those described[119] - Key contractual obligations include registration rights for certain security holders and a deferred underwriting fee of $7,000,000 payable upon the closing of a Business Combination[120][121] Critical Accounting Policies This section highlights the company's significant accounting policies that require management's judgment and estimation - The company's critical accounting policies include classifying Class A Ordinary Shares subject to possible redemption as temporary equity, measured at redemption value with immediate recognition of changes[123][124] - Net income (loss) per share is calculated using the two-class method, allocating income/loss between redeemable and non-redeemable shares[125] - Warrant instruments are classified as equity based on specific terms and accounting guidance (ASC 480 and ASC 815)[126] Recent Accounting Standards This section discusses the potential impact of recently issued accounting pronouncements on the company's financial statements - The company is currently assessing the impact of ASU 2020-06, effective January 1, 2024, which simplifies accounting for certain financial instruments like convertible debt and contracts in an entity's own equity[127] - Management does not believe other recently issued, but not yet effective, accounting pronouncements would materially affect the financial statements[128] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, A SPAC II Acquisition Corp. is not required to provide quantitative and qualitative disclosures about market risk - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[129] Item 4. Controls and Procedures Management, with the participation of its Certifying Officers, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2023, concluding they were effective. No material changes in internal control over financial reporting occurred during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2023[130] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[132] - Disclosure controls, while effective, provide only reasonable assurance and may not prevent all errors or fraud due to inherent limitations and resource constraints[131] Part II - Other Information This part includes additional information such as legal proceedings, equity sales, and exhibits, supplementing the financial disclosures Item 1. Legal Proceedings The company is not currently a party to any material litigation or legal proceedings and is unaware of any legal exposure that could have a material adverse effect on its business, financial condition, or results of operations - The company is not currently involved in any material litigation or other legal proceedings[133] - There is no known legal exposure with a more than remote possibility of materially adversely affecting the business[133] Item 1A. Risk Factors As a smaller reporting company, A SPAC II Acquisition Corp. is not required to provide disclosures under the Risk Factors item - The company is exempt from providing risk factor disclosures due to its status as a smaller reporting company[134] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the IPO on May 5, 2022, which generated $200,000,000 from the sale of 20,000,000 units, and a simultaneous private placement of 8,966,000 Private Placement Warrants for $8,966,000. A total of $203,500,000 from these proceeds was deposited into a Trust Account - The IPO on May 5, 2022, involved the sale of 20,000,000 Units at $10.00 each, generating gross proceeds of $200,000,000[134] - A simultaneous Private Placement of 8,966,000 Private Placement Warrants at $1.00 each generated total proceeds of $8,966,000[135] - A total of $203,500,000 from the IPO and Private Placement proceeds was deposited into a Trust Account[136] - Transaction costs included approximately $3,380,000 in underwriting fees and commissions and $567,629 for other formation and IPO-related expenses[137] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - There were no defaults upon senior securities[137] Item 4. Mine Safety Disclosures The company reported no mine safety disclosures - There were no mine safety disclosures[137] Item 5. Other Information The company reported no other information - No other information was reported under this item[137] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and various Inline XBRL documents[139] Signatures This section confirms the official signing of the report by the principal executive officer - The report was signed by Serena Shie, Chief Executive Officer (Principal Executive Officer), on behalf of A SPAC II Acquisition Corp. on May 12, 2023[141]