Clean Earth Acquisitions (CLIN) - 2022 Q1 - Quarterly Report

Part I. Financial Information Item 1. Condensed Financial Statements (Unaudited) This section presents Clean Earth Acquisitions Corp.'s unaudited condensed financial statements and accompanying notes for the quarter ended March 31, 2022 Condensed Balance Sheets Total assets significantly increased to $233.8 million by March 31, 2022, primarily due to IPO proceeds in the Trust Account, leading to a $7.6 million stockholders' deficit | Balance Sheet Highlights | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash | $858,771 | $33,912 | | Marketable securities held in Trust Account | $232,321,378 | $0 | | Total Assets | $233,797,883 | $737,180 | | Liabilities | | | | Total Current Liabilities | $1,070,813 | $714,726 | | Deferred underwriter fee payable | $8,050,000 | $0 | | Total Liabilities | $9,120,813 | $714,726 | | Stockholders' Equity (Deficit) | ($7,644,308) | $22,454 | - As of March 31, 2022, there were 23,000,000 shares of Class A common stock subject to possible redemption, valued at $232,321,378[6][10] Condensed Statement of Operations The company reported a net loss of $240,003 for the three months ended March 31, 2022, primarily due to operating costs offset by dividend income | Item | Amount (Three Months Ended March 31, 2022) | | :--- | :--- | | Formation and operating costs | $261,381 | | Loss from operations | ($261,381) | | Dividend income | $21,378 | | Net loss | ($240,003) | Condensed Statement of Changes in Stockholders' (Equity) Deficit Stockholders' equity shifted from a positive balance to a $7.6 million deficit by March 31, 2022, driven by IPO-related remeasurements and net loss - The stockholders' deficit increased primarily due to a $39.6 million remeasurement of Class A common stock to its redemption value, which was treated as a deemed dividend, and the period's net loss of $240,003[15] Condensed Statement of Cash Flows Net cash used in operations was $775,427, while financing activities provided $233.9 million, resulting in a net cash increase of $824,859 for the period | Cash Flow Activity | Amount (Three Months Ended March 31, 2022) | | :--- | :--- | | Net cash used in operating activities | ($775,427) | | Net cash used in investing activities | ($232,300,000) | | Net cash provided by financing activities | $233,900,286 | | Net Change in Cash | $824,859 | Notes to Unaudited Condensed Financial Statements These notes detail the company's blank check nature, IPO proceeds, significant accounting policies, related-party transactions, commitments, and a going concern uncertainty - The company is a blank check company incorporated on May 14, 2021, for the purpose of effecting a business combination, with all activity through March 31, 2022, relating to its formation and IPO[22][23] - On February 28, 2022, the company completed its IPO of 23,000,000 units at $10.00 per unit, raising $230 million, and simultaneously sold 890,000 private placement units to its Sponsor for $8.9 million, with a total of $232.3 million placed in a trust account[24][25] - Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for one year from the financial statement issuance date, due to significant acquisition costs and limited financial resources[40][41] - The Sponsor purchased 890,000 private units for $8.9 million and previously paid $25,000 for 7,666,667 Founder Shares (Class B common stock), with a promissory note fully repaid on February 28, 2022[74][78][79] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, IPO, and search for a business combination, reporting a net loss of $240,003 and a going concern uncertainty - The company is a blank check company that consummated its IPO on February 28, 2022, with all activity to date relating to formation, the IPO, and the search for a business combination candidate[116][117][121] - For the three months ended March 31, 2022, the company had a net loss of $240,003, consisting of various expenses partially offset by $21,378 of dividend income from the Trust Account[122] - Management has identified a going concern issue, citing that the company lacks the financial resources to sustain operations for a year and its ability to continue is dependent on successfully consummating a business combination[126][127] - The company has a contractual obligation for a $8,050,000 deferred underwriting discount, which is payable from the Trust Account only upon the completion of a Business Combination[132] Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Clean Earth Acquisitions Corp. is not required to provide quantitative and qualitative disclosures about market risk[142] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control - Based on an evaluation as of March 31, 2022, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[144] - No material changes occurred in the company's internal control over financial reporting during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls[145] Part II. Other Information Item 1. Legal Proceedings The company reports no legal proceedings to disclose - The company has no legal proceedings to report[149] Item 1A. Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's IPO prospectus - As of the date of this report, there have been no material changes to the risk factors disclosed in the company's final IPO prospectus[150] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities This section details the $230 million gross proceeds from the IPO and $8.9 million from private placement units, with $232.3 million placed in the Trust Account and $18.7 million in total offering costs | Transaction | Units Sold | Price Per Unit | Gross Proceeds | | :--- | :--- | :--- | :--- | | Initial Public Offering | 23,000,000 | $10.00 | $230,000,000 | | Private Placement | 890,000 | $10.00 | $8,900,000 | - From the gross proceeds of the IPO and private placement, a total of $232,300,000 was placed in the Trust Account[154] - Total offering costs were $18,741,708, which included $4.6 million in paid underwriting discounts, $8.05 million in deferred underwriting discounts, $4.7 million in incentives to an anchor investor, and $1.36 million in other offering costs[155] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company has no defaults upon senior securities to report[158] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine safety disclosures are not applicable to the company[160] Item 5. Other Information The company reports no other information - There is no other information to report for this period[162] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including key agreements related to the company's formation and IPO - The report includes several exhibits, such as the Underwriting Agreement, Second Amended and Restated Certificate of Incorporation, Warrant Agreement, Rights Agreement, and various certifications by the principal executive and financial officers[164]