Cepton(CPTN) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements The company, a blank check entity, reported total assets of $173.3 million and a net loss of $1.53 million for the quarter ended June 30, 2021, with a subsequent business combination agreement signed with Cepton Technologies, Inc Condensed Balance Sheets As of June 30, 2021, the company's total assets were $173.3 million, with $172.5 million in the Trust Account and warrant liabilities increasing to $8.6 million Condensed Balance Sheet Data (Unaudited) | Account | June 30, 2021 (USD) | March 31, 2021 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash | $718,500 | $749,737 | | Investments held in Trust Account | $172,511,739 | $172,505,514 | | Total Assets | $173,310,771 | $173,370,188 | | Liabilities & Equity | | | | Warrant liabilities | $8,607,750 | $7,141,500 | | Total liabilities | $8,681,300 | $7,215,256 | | Class A common stock subject to possible redemption | $159,629,470 | $161,154,930 | | Total shareholders' equity | $5,000,001 | $5,000,002 | Unaudited Condensed Statements of Operations For the three months ended June 30, 2021, the company reported a net loss of $1.53 million, primarily driven by a $1.47 million non-cash loss from the change in fair value of warrants Statement of Operations for the Three Months Ended June 30, 2021 (Unaudited) | Item | Amount (USD) | | :--- | :--- | | General and administrative expenses | $66,638 | | Loss from operations | ($66,638) | | Change in fair value of warrants | ($1,466,250) | | Interest income | $7,427 | | Net loss | ($1,525,461) | | Basic and diluted net loss per share, Class B | ($0.28) | Notes to Unaudited Condensed Financial Statements The notes detail the company's formation as a SPAC, its $172.5 million IPO, warrant accounting policies, and the subsequent August 5, 2021, Business Combination Agreement with Cepton Technologies, Inc., including a $50 million PIPE investment - The company, a blank check entity, completed its IPO on February 2, 2021, raising $172.5 million from 17,250,000 units at $10.00 per unit[22][23] - The company must complete an initial Business Combination by August 2, 2022, or cease operations and redeem all public shares[34] - On August 5, 2021, the company entered a Business Combination Agreement with Cepton Technologies, Inc., including a concurrent $50 million PIPE investment from Koito Manufacturing Co., LTD[114][115] - Warrants are accounted for as a liability at fair value, with changes recognized in the statement of operations; as of June 30, 2021, the warrant liability was valued at $8,607,750[64][95] Management's Discussion and Analysis of Financial Condition and Results of Operations As a blank check company with no operations, the company reported a net loss of $1.53 million for the three months ended June 30, 2021, primarily due to warrant fair value adjustments, with $718,500 in cash for working capital - The company is a blank check entity formed to effect a business combination and has not commenced operations[119] - For the three months ended June 30, 2021, the $1,525,461 net loss comprised $66,638 in general and administrative costs and a $1,466,250 unrealized loss on warrant fair value, partially offset by $7,427 in interest income[126] - As of June 30, 2021, the company held $718,500 in cash and $172.5 million in the Trust Account from IPO and private placement proceeds[127][130] - The company pays a monthly fee of $5,750 to an affiliate of the Sponsor for office space, utilities, and administrative support, commencing January 29, 2021[135] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[139] Controls and Procedures As of June 30, 2021, the company's disclosure controls and procedures were deemed ineffective due to a material weakness related to warrant accounting reclassification, with no other material changes to internal controls during the quarter - The company's disclosure controls and procedures were deemed not effective as of June 30, 2021[141] - The ineffectiveness stemmed from a material weakness in accounting and reporting for SPAC warrants, necessitating reclassification from equity to liability[141] - No changes in internal control over financial reporting occurred during the quarter that materially affected or are likely to materially affect the company's internal controls[143] PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings - There are no legal proceedings to report[145] Risk Factors No material changes to risk factors have occurred since the prospectus filed on February 2, 2021 - No material changes to risk factors have occurred since the prospectus filed on February 2, 2021[146] Unregistered Sales of Equity Securities and Use of Proceeds On February 2, 2021, the company completed a private placement of 5,175,000 warrants for $5,175,000, with $172.5 million placed in a trust account and $968,580 allocated for general and administrative expenses and due diligence - Simultaneously with the IPO, the company sold 5,175,000 Private Placement Warrants at $1.00 each, raising $5,175,000[147] - Of the total proceeds from the IPO and Private Placement, $172,500,000 was placed into the trust account[149] - Approximately $968,580 held outside the Trust Account is designated for business, legal, and accounting due diligence, as well as ongoing general and administrative expenses[150] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[152] Mine Safety Disclosures This item is not applicable to the company - Not applicable[152] Other Information The company reported no other information - None[152] Exhibits This section lists all exhibits filed with the Form 10-Q, including underwriting, warrant, and registration rights agreements, along with officer certifications - The report includes a list of filed exhibits, such as the Underwriting Agreement, Business Combination Marketing Agreement, Warrant Agreement, and various Registration Rights Agreements[156]