FiscalNote(US:NOTE)2021-11-24 11:13PART I. FINANCIAL INFORMATION Unaudited Condensed Financial Statements This section presents the unaudited condensed financial statements for Duddell Street Acquisition Corp., highlighting the restatement of prior periods and the proposed business combination with FiscalNote Holdings, Inc Condensed Balance Sheets The balance sheet as of September 30, 2021, shows total assets of $175.6 million, liabilities of $18.7 million, and a shareholders' deficit of $18.1 million, with $175.0 million in redeemable Class A ordinary shares Condensed Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2021 | Dec 31, 2020 (Restated) | | :--- | :--- | :--- | | Assets | | | | Cash | $98,665 | $— | | Investments held in Trust Account | $175,084,390 | $175,030,689 | | Total Assets | $175,564,377 | $176,232,179 | | Liabilities & Equity | | | | Total current liabilities | $2,994,168 | $359,697 | | Deferred underwriting commissions | $6,125,000 | $6,125,000 | | Derivative warrant liabilities | $9,547,500 | $20,805,000 | | Total Liabilities | $18,666,668 | $27,289,697 | | Class A ordinary shares subject to possible redemption | $175,000,000 | $175,000,000 | | Total shareholders' deficit | ($18,102,291) | ($26,057,518) | Unaudited Condensed Statements of Operations The company reported net income of $2.5 million for the quarter and $8.0 million for the nine months ended September 30, 2021, primarily driven by non-operating gains from derivative warrant liabilities Statement of Operations Summary (Unaudited) | Item | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | General and administrative expenses | ($1,071,145) | ($3,355,975) | | Interest earned on investments held in Trust Account | $2,253 | $53,702 | | Change in fair value of derivative warrant liabilities | $3,562,500 | $11,257,500 | | Net income | $2,493,608 | $7,955,227 | Notes to Unaudited Condensed Financial Statements These notes provide critical context, detailing the company's SPAC nature, going concern doubts, restatement of prior financial statements, and the definitive merger agreement with FiscalNote Holdings, Inc - The company is a blank check company with a 24-month period from its IPO (until November 2, 2022) to complete a Business Combination1929 - Management has identified a working capital deficit that raises substantial doubt about the Company's ability to continue as a going concern48 - Previously issued financial statements for the quarters ended March 31, 2021, and June 30, 2021, were restated to classify all Class A ordinary shares subject to possible redemption as temporary equity, correcting a material error3536 - On November 7, 2021, the Company entered into a definitive merger agreement with FiscalNote Holdings, Inc., with the transaction expected to close in the first quarter of 2022109112 - In connection with the proposed merger, the company has secured $100 million in PIPE financing and a $175 million backstop agreement from affiliates of the Sponsor117120 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's status as a blank check company, its non-operating net income, going concern doubts, and the proposed business combination with FiscalNote, including financing details - The company is a blank check company incorporated on August 28, 2020, for the purpose of effecting a business combination125 Results of Operations Summary | Period | Net Income / (Loss) | Key Driver | | :--- | :--- | :--- | | Q3 2021 (3 months) | ~$2.5 million | $3.6M gain on warrant liabilities | | YTD 2021 (9 months) | ~$8.0 million | $11.3M gain on warrant liabilities | | Inception to Sep 30, 2020 | ~($35,000) | General & administrative expenses | - A working capital deficit of approximately $2.5 million as of September 30, 2021, raises substantial doubt about the company's ability to continue as a going concern136138 - On November 7, 2021, the company entered into a definitive merger agreement with FiscalNote Holdings, Inc., which includes a $100 million PIPE financing commitment and a $175 million backstop agreement147152155 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 risk169 Controls and Procedures Management concluded that disclosure controls and procedures were ineffective due to a material weakness in accounting for complex financial instruments, leading to restatements and ongoing remediation efforts - Disclosure controls and procedures were deemed not effective as of September 30, 2021170 - A material weakness was identified in internal control over financial reporting concerning the accounting for complex features of Class A ordinary shares and warrants170 - This material weakness led to the restatement of the interim financial statements for the quarters ended March 31, 2021, and June 30, 2021170 - Remediation efforts include performing additional accounting and financial analyses and consulting with subject matter experts172 PART II. OTHER INFORMATION Legal Proceedings There is no material litigation, arbitration, or governmental proceeding currently pending against the company or its management team - There is no material litigation, arbitration or governmental proceeding currently pending against the company174 Risk Factors This section highlights no material changes to previously disclosed risk factors, except for a new material weakness in internal control over financial reporting related to complex financial instruments - A material weakness has been identified in the company's internal control over financial reporting related to accounting for complex financial instruments176177 - This weakness resulted in the restatement of previously filed financial statements and could adversely affect investor confidence and operating results177 - The company faces potential adverse regulatory consequences, litigation, or other disputes arising from the restatements and material weakness180 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None181 Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - The report includes CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906186 - XBRL Instance Document and related taxonomy files are included as exhibits186