PART I. FINANCIAL INFORMATION Condensed Financial Statements Substantial stock redemptions dramatically altered the company's financial position, reducing trust assets and impacting net income Condensed Balance Sheets Total assets fell from $244.9 million to $11.9 million due to a significant decrease in the Trust Account from shareholder redemptions | Financial Item | Sep 30, 2023 (Unaudited) | Dec 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Total current assets | $1,433,269 | $538,802 | | Investments held in Trust Account | $10,426,124 | $244,314,622 | | Total Assets | $11,859,393 | $244,853,424 | | Liabilities & Equity | | | | Total current liabilities | $4,626,318 | $899,083 | | Deferred underwriting commissions | $6,600,000 | $12,000,000 | | Class A common stock subject to possible redemption | $11,221,524 | $243,597,590 | | Total stockholders' deficit | ($11,262,254) | ($11,884,732) | | Total Liabilities, Redeemable Stock & Deficit | $11,859,393 | $244,853,424 | Unaudited Condensed Statements of Operations Net income for the nine-month period fell sharply from $8.6 million to $284,429, driven by a loss on the fair value of derivative liabilities | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Loss from operations | ($575,375) | ($328,243) | ($1,747,947) | ($1,178,961) | | Change in fair value of derivative liabilities | $7,245 | $1,790,500 | ($588,915) | $8,726,170 | | Gain on investments held in Trust Account | $384,239 | $1,170,566 | $2,898,987 | $1,299,387 | | Net (Loss) Income | ($227,581) | $2,391,031 | $284,429 | $8,604,804 | Unaudited Condensed Statements of Cash Flows Cash flow reflects a $234.3 million outflow for stock redemptions, funded by withdrawals from the Trust Account - The company withdrew $234.8 million from its Trust Account to fund the redemption of common stock20 - Net cash used in financing activities was $234.3 million, almost entirely due to the redemption of common stock20 Notes to Unaudited Condensed Financial Statements Notes detail the SPAC's extended deadline, major redemptions, a new business combination agreement, a new excise tax liability, and a going concern warning - The company must complete a business combination by December 7, 2023, with the possibility to extend monthly up to June 7, 202435 - In March 2023, holders of 21,151,393 Class A shares (approx 88.1%) elected to redeem, leaving about $28.7 million in the trust account36 - The Business Combination Agreement with Avila Energy Corp was terminated on August 10, 2023, and a new agreement was signed with Alpha Modus, Corp on October 13, 20234451 - A liability of $2,348,302 was recorded for the new 1% federal excise tax on stock repurchases following redemptions5559 - Management has determined that there is substantial doubt about the Company's ability to continue as a going concern67 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses its status as a blank check company, a new business combination agreement, and substantial doubt about its ability to continue as a going concern - The company is a blank check company with no operating history or revenues, formed to effect a Business Combination162164 - The initial Business Combination Agreement with Avila Energy was terminated, and a new agreement was entered into with Alpha Modus, Corp on October 13, 2023173179 - As of September 30, 2023, the company had a working capital deficit of approximately $3.2 million and management has expressed substantial doubt about its ability to continue as a going concern181184 - The company recorded a liability for the 1% excise tax on share redemptions, which the surviving company would be responsible for if the Alpha Modus deal closes189190 Quantitative and Qualitative Disclosures About Market Risk The company is exempt from this disclosure requirement as a smaller reporting company - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk207 Controls and Procedures Disclosure controls were deemed ineffective due to material weaknesses in timely SEC filings and improper fund transfers - Disclosure controls and procedures were deemed ineffective as of September 30, 2023208 - A material weakness was identified due to the company's inability to timely file its Form 10-K and subsequent Form 10-Qs208 - A second material weakness was identified related to an improper transfer of funds from the Trust account to the Sponsor, which were later returned209 PART II. OTHER INFORMATION Legal Proceedings The company reports no current legal proceedings - There are no legal proceedings to report216 Risk Factors No material changes have been made to the risk factors previously disclosed in the Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K have occurred217 Unregistered Sales of Equity Securities and Use of Proceeds Following a deadline extension vote, 1.85 million shares were redeemed for a total of $19.2 million from the Trust Account - At the September 6, 2023 annual meeting, stockholders approved an extension for the business combination deadline to June 7, 2024218 - Following the vote, 1,847,662 shares were redeemed for a total of $19,208,848 from the Trust Account218 Other Information The company reports no other material information for this period - There is no other information to report for this item221 Exhibits This section lists all exhibits filed with the report, including key agreements and certifications - Exhibits filed include the Business Combination Agreement with Alpha Modus, Corp, amendments to the Certificate of Incorporation, and various support and lock-up agreements223
Insight Acquisition (INAQ) - 2023 Q3 - Quarterly Report