MicroAlgo (MLGO) - 2022 Q1 - Quarterly Report

Financial Position - The Company reported cash and investments held in the Trust Account amounting to $46,779,664 as of March 31, 2022, compared to $46,469,183 as of December 31, 2021, indicating a slight increase in assets [49]. - As of March 31, 2022, the investment securities in the Company's Trust Account amounted to $46,779,664 in U.S. Treasury Bills, an increase from $46,469,183 as of December 31, 2021 [68]. - The fair value of U.S. Treasury Securities held in the Trust Account was $46,779,664 as of March 31, 2022 [94]. - The Company has no market or interest rate risk as of March 31, 2022, with investments in U.S. government treasury bills or money market funds [142]. Equity and Liabilities - The Company has 4,600,000 ordinary shares subject to possible redemption classified as temporary equity as of March 31, 2022, consistent with the previous reporting period [54]. - The Company has elected to account for its Public Warrants as equity and Private Warrants as liabilities, reflecting a strategic approach to financial instruments [52]. - The Company’s warrant liabilities were valued at $420,000 as of March 31, 2022, classified as Level 3 due to the use of unobservable inputs [94]. Tax and Compliance - The Company has not recognized any unrecognized tax benefits or accrued interest and penalties related to tax positions as of March 31, 2022, indicating no current tax liabilities [61]. - The Company’s financial statements are prepared in accordance with U.S. GAAP, ensuring compliance with accounting principles and regulations [42]. Business Operations - The Company has made estimates and assumptions that could significantly affect reported amounts of assets and liabilities, highlighting the importance of management judgment in financial reporting [47]. - The Company has advanced $534,420 from the Sponsor as of March 31, 2022, compared to $373,421 as of December 31, 2021 [76]. - The Company has agreed to pay $10,000 per month for general and administrative services provided by an affiliate of the Sponsor [77]. - The Company incurred rent expenses of $6,109 and $23,639 for the years ended December 31, 2021 and 2020, respectively [104]. Performance Metrics - The net loss for the three months ended March 31, 2022, was $484,304, compared to a net loss of $3,721,131 for the same period in 2021, indicating a significant improvement [66]. - The basic and diluted net loss per share for the three months ended March 31, 2022, was $(0.01), compared to $(0.08) for the same period in 2021 [66]. Initial Public Offering - The Company sold 4,600,000 Units in its Initial Public Offering at a price of $10.00 per Unit, including a full exercise of the underwriters' over-allotment option [69]. - The upfront underwriting discount paid to the underwriter for the Initial Public Offering was $805,000, which is 1.75% of the per unit offering price [71]. - The underwriters are entitled to a deferred fee of 2.5% of the gross proceeds of the Initial Public Offering, amounting to $1,150,000 [105]. Business Combination - The Company may extend the time to consummate a Business Combination by up to nine times, with each extension requiring a deposit of $153,333 into the Trust Account [80]. - The Company issued unsecured promissory notes of $153,333 each to the Sponsor to extend the time available for completing a Business Combination until May 11, 2022 [81]. - The Company deposited $153,333 into its Trust Account to extend the deadline for completing a business combination to May 11, 2022 [114]. - The merger with VIYI is valued at $400 million, with VIYI shareholders set to receive approximately 39.6 million ordinary shares, representing about 85% of the combined outstanding shares [109]. Fair Value Measurements - The Company’s fair value measurements approximate carrying amounts due to the short maturities of financial instruments, indicating a stable valuation environment [58]. - The Company established the initial fair value for the private warrants at $380,000 on February 11, 2021, using a Black-Scholes model [97]. - As of March 31, 2022, the aggregate value of the Private Warrants was $0.42 million, with a change in fair value of approximately $10,000 from December 31, 2021 [98]. Company Identity - The Company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from various reporting requirements [45]. - The Company plans to change its name to "MicroAlgo Inc." following the completion of the merger with VIYI [107].