Part I Business The company is a blank check company (SPAC) focused on effecting a business combination with a firm in the blockchain-enabled financial services and technology sectors - The company is a blank check company focused on acquiring businesses in the financial services and technology sectors that are enabled by blockchain technology11 Initial Public Offering and Private Placement Details (November 2021) | Offering | Units | Price per Unit | Gross Proceeds | | :--- | :--- | :--- | :--- | | Initial Public Offering | 30,000,000 | $10.00 | $300.0 million | | Private Placement (to Sponsor) | 1,322,000 | $10.00 | $13.2 million | - On November 10, 2022, the company entered into a Business Combination Agreement with Qenta Inc., a Delaware corporation, involving a reincorporation and merger1718 - The deadline to complete a business combination was extended to November 15, 2023, which resulted in the redemption of 26,406,729 Class A shares for approximately $274.2 million2425 - The company's business strategy focuses on identifying blockchain-enabled technology companies with an enterprise value of $1.0 billion to $3.0 billion3233 Risk Factors The company faces significant risks centered on the potential failure of the Qenta business combination, its "going concern" status, and substantial shareholder redemptions Risks Relating to Business Combination The Qenta business combination faces uncertainty, while the company's "going concern" status is in doubt due to a working capital deficit and significant shareholder redemptions - The proposed Qenta Business Combination is subject to numerous closing conditions and may not be completed by the November 15, 2023 deadline4950 - The company's independent registered public accounting firm's report expresses substantial doubt about its ability to continue as a "going concern" due to a working capital deficit of approximately $3.9 million as of December 31, 202260 - Following redemptions of 26,406,729 shares, approximately $37.3 million remains in the Trust Account, which may make it difficult to complete a desirable business combination59 - The SEC has issued proposed rules to regulate SPACs, which could increase costs, time, and complexity to complete a business combination161162 Risks Relating to Our Securities The company's securities face risks of delisting from Nasdaq, earnings volatility from warrant accounting, and significant dilution from Founder Shares - The company's securities may be delisted from Nasdaq if it fails to meet listing requirements, which would limit liquidity and trading175176177 - The company's warrants are accounted for as derivative liabilities, and changes in their fair value can cause volatility in financial results218219 - The Sponsor paid a nominal price of approximately $0.003 per Founder Share, which could result in significant dilution to public shareholders and a substantial profit for the Sponsor even if the share price falls212214216 Risks Relating to Our Management Team The company is dependent on a small management team whose members have potential conflicts of interest due to other business obligations and financial incentives - The company's operations are dependent on a small group of executive officers and directors who are not required to commit a specific amount of time to its affairs255265266 - Officers and directors have fiduciary duties to other entities and may present suitable business opportunities to those entities before presenting them to the company267268269 - The Sponsor and management will lose their entire investment if a business combination is not completed, creating a conflict of interest276278 Risks Relating to Taxation The company and its investors face tax risks including potential classification as a PFIC and the imposition of a new 1% excise tax on share redemptions - The company may be considered a Passive Foreign Investment Company (PFIC), which could lead to adverse U.S. federal income tax consequences for U.S. investors296298 - A new 1% U.S. federal excise tax on stock repurchases may apply to redemptions, which could reduce the cash available for the business combination299300 - Reincorporating into a U.S. jurisdiction in connection with the business combination may result in adverse tax consequences for both U.S. and non-U.S. shareholders292293 Unresolved Staff Comments The company reports that it has no unresolved staff comments from the SEC - None311 Properties The company maintains its executive offices in the Cayman Islands and receives administrative services from its Sponsor for a monthly fee - The company's executive offices are located at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands311 - The company pays its Sponsor $15,000 per month for office space and administrative support services311 Legal Proceedings The company is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings312 Mine Safety Disclosures This item is not applicable to the company - None312 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's securities trade on Nasdaq, and it has not paid any cash dividends - The company's securities trade on the Nasdaq Stock Market under the symbols BCSAU (Units), BCSA (Class A ordinary shares), and BCSAW (warrants)315 - The company has never paid cash dividends and does not plan to pay any before completing its initial business combination317 Management's Discussion and Analysis of Financial Condition and Results of Operations The company reported net income of $9.3 million for 2022 but faces a significant liquidity issue and substantial doubt about its ability to continue as a going concern Results of Operations | Metric | For the Year Ended Dec 31, 2022 | For the Period from Jun 11, 2021 to Dec 31, 2021 | | :--- | :--- | :--- | | General & Administrative Expenses | ($4.1 million) | ($0.3 million) | | Change in Fair Value of Derivative Liabilities | $9.9 million | $0.6 million | | Income from Investments in Trust Account | $4.3 million | $1,090 | | Net Income (Loss) | $9.3 million | ($0.4 million) | - As of December 31, 2022, the company had approximately $255,000 in cash and a working capital deficit of approximately $3.9 million344 - Management has determined that there is substantial doubt about the company's ability to continue as a going concern due to its liquidity needs347 - To fund operations, the company has a promissory note agreement with its Sponsor for up to $1,500,000 in working capital loans346 Quantitative and Qualitative Disclosure About Market Risk As a smaller reporting company, this information is not required - The company is a smaller reporting company and is not required to provide this information363 Financial Statements and Supplementary Data The company's audited financial statements highlight a "going concern" uncertainty and a shareholders' deficit of $16.7 million as of December 31, 2022 - The independent auditor's report expresses substantial doubt about the Company's ability to continue as a going concern450 Consolidated Balance Sheet Highlights (as of Dec 31, 2022) | Account | Amount (USD) | | :--- | :--- | | Assets | | | Cash | $254,781 | | Investments held in Trust Account | $310,263,214 | | Total Assets | $310,902,625 | | Liabilities & Equity | | | Total Liabilities | $17,412,008 | | Class A ordinary shares subject to possible redemption | $310,163,214 | | Total shareholders' deficit | ($16,672,597) | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2022) | Account | Amount (USD) | | :--- | :--- | | Loss from operations | ($4,280,895) | | Change in fair value of derivative liabilities | $9,908,473 | | Income earned on investments held in Trust Account | $4,262,124 | | Net income | $9,348,878 | Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of year-end 2022 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022366 - Management determined that the company's internal controls over financial reporting were effective as of December 31, 2022, based on the COSO framework369 Part III Directors, Executive Officers and Corporate Governance The company is led by an experienced management team and a board with three independent directors overseeing key committees Executive Officers and Directors | Name | Title | | :--- | :--- | | Lou Kerner | Managing Director, Chief Executive Officer and Director | | Matthew C. Le Merle | Managing Director, Chairman of the Board of Directors | | Alison Davis | Managing Director | | Mitchell Mechigian | Chief Financial Officer | | Colin Weil | Director | | Gary Cookhorn | Director | | Rebecca Macieira-Kaufmann | Director | - The board of directors has three independent directors: Colin Weil, Gary Cookhorn, and Rebecca Macieira-Kaufmann384 - The board has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee, each comprised of the three independent directors387389390 Executive Compensation The company's executive officers and directors have not received any compensation for their services but are reimbursed for out-of-pocket expenses - No executive officers or directors have received any cash or non-cash compensation for services rendered to the company409 - The Sponsor, executive officers, and directors are reimbursed for out-of-pocket expenses related to company activities, such as identifying potential target businesses409 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The company's Sponsor and management beneficially own approximately 75.9% of the outstanding ordinary shares, giving them effective control Security Ownership of Beneficial Owners and Management (as of April 14, 2023) | Name of Beneficial Owner | Number of Shares Beneficially Owned | Approximate Percentage of Outstanding Ordinary Shares | | :--- | :--- | :--- | | Blockchain Coinvestors Acquisition Sponsors I LLC (Sponsor) | 11,172,000 | 74.9% | | Matthew C. Le Merle | 11,172,000 | 74.9% | | Lou Kerner | 11,172,000 | 74.9% | | Alison Davis | 11,172,000 | 74.9% | | All directors and officers as a group (7 individuals) | 11,322,000 | 75.9% | - Due to their collective ownership of approximately 75.9% of outstanding shares, the initial shareholders have sufficient voting power to approve a business combination without the vote of any public shareholders422408 Certain Relationships and Related Transactions, and Director Independence The company has several related party transactions with its Sponsor, including the purchase of Founder Shares, Private Placement Units, and provision of working capital loans - The Sponsor purchased Founder Shares for an aggregate price of $25,000425 - Simultaneously with the IPO, the Sponsor purchased 1,322,000 Private Placement Units at $10.00 per unit for a total of $13.2 million426 - The Sponsor provides working capital loans to the company as needed; as of December 31, 2022, $512,000 was drawn and outstanding under a $1.5 million promissory note431 - The company pays an affiliate of the Sponsor $15,000 per month for secretarial and administrative services432 Principal Accounting Fees and Services The company paid its independent accounting firm total fees of $85,390 in 2022 and $129,108 in 2021, primarily for audit services Accountant Fees | Fee Category | FY 2022 | FY 2021 | | :--- | :--- | :--- | | Audit Fees | $81,640 | $129,108 | | Audit-Related Fees | $0 | $0 | | Tax Fees | $3,750 | $0 | | All Other Fees | $0 | $0 | | Total | $85,390 | $129,108 | Part IV Exhibits, Financial Statement Schedules This section lists key legal and financial agreements filed as part of the Form 10-K - Key exhibits filed include the Business Combination Agreement with Qenta Inc., the Warrant Agreement, and the Registration and Shareholder Rights Agreement438 Form 10-K Summary This item is not applicable - None442
Blockchain nvestors Acquisition I(BCSA) - 2022 Q4 - Annual Report