Pyrophyte Acquisition (PHYT) - 2022 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION This section provides the unaudited condensed financial statements and management's analysis for Pyrophyte Acquisition Corp Condensed Financial Statements Presents unaudited condensed financial statements for Pyrophyte Acquisition Corp. as of September 30, 2022 Condensed Balance Sheets Presents the company's financial position as of September 30, 2022, including assets, liabilities, and shareholders' deficit | Financial Item | September 30, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Cash | $265,075 | $966,695 | | Investments and cash held in Trust Account | $207,690,429 | $206,299,296 | | Total Assets | $208,395,601 | $207,945,686 | | Total Liabilities | $12,901,867 | $20,080,666 | | Class A ordinary shares subject to possible redemption | $207,590,429 | $206,281,250 | | Total shareholders' deficit | $(12,096,695) | $(18,416,230) | Condensed Statements of Operations Details the company's net income for the three and nine months ended September 30, 2022, driven by non-cash gains | Item | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | General and administrative expenses | $254,584 | $2,034,395 | | Change in fair value of derivative warrant liabilities | $2,830,625 | $8,271,893 | | Gain on investments held in Trust Account | $1,023,730 | $1,391,133 | | Net income (loss) | $3,599,837 | $7,628,714 | Condensed Statements of Cash Flows Outlines cash flows for the nine months ended September 30, 2022, showing net cash used in operating activities - Net cash used in operating activities for the nine months ended September 30, 2022, was $662,120[20] - The company's cash balance decreased by $701,620 during the first nine months of 2022, ending at $265,075[20] Notes to Unaudited Condensed Financial Statements Provides detailed disclosures on the company's formation, accounting policies, going concern, and related party transactions - The company is a blank check company that consummated its IPO of 20,125,000 units on October 29, 2021, raising gross proceeds of $201,250,000[23][25] - Management has determined that liquidity conditions raise substantial doubt about the Company's ability to continue as a going concern, as the liquidation deadline is within the next twelve months if a Business Combination is not consummated[41][42] - All outstanding warrants (10,062,500 Public Warrants and 10,156,250 Private Placement Warrants) are recognized as derivative liabilities at fair value, with changes in fair value recognized in the statement of operations[63][90] - The Sponsor paid $25,000 for 5,031,250 Class B Founder Shares and purchased 10,156,250 Private Placement Warrants at $1.00 each[71][73] - The Sponsor also provides administrative support for a monthly fee, which was reduced from $15,000 to $5,000 on July 1, 2022[79] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operational results, liquidity, and going concern uncertainty - The company is a blank check company seeking a business combination with a target in the energy transition sector, focusing on decarbonization and sustainable energy[117] - For the nine months ended September 30, 2022, the company had a net income of $7,628,714, consisting of a $8,271,893 gain in fair value of derivative warrant liabilities and a $1,391,133 gain on marketable securities, offset by $2,034,395 in operating costs[125] - Management has determined that there is substantial doubt about the company's ability to continue as a going concern due to limited cash ($265,075 as of Sept 30, 2022) and the approaching deadline to consummate a business combination[134][135] - The administrative support agreement with the Sponsor was amended on July 1, 2022, reducing the monthly fee from $15,000 to $5,000[142] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, the company is not required to provide quantitative and qualitative disclosures about market risk[155] Controls and Procedures Management concluded that disclosure controls were ineffective due to a material weakness in financial reporting - Management concluded that disclosure controls and procedures were not effective as of September 30, 2022[157] - A material weakness was identified in internal control over financial reporting related to recording accruals and accounting for complex financial instruments[158] - The company plans to enhance its processes, including increased communication with third-party service providers and additional review procedures, to remediate the material weakness[160] PART II–OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures Legal Proceedings The company reports no legal proceedings - There are no legal proceedings to report[163] Risk Factors This section highlights key risks including regulatory changes, geopolitical events, and investment company status - Proposed SEC rules for SPACs, if adopted, may materially adversely affect the company's ability to negotiate and complete its initial business combination and may increase costs and time[166] - The search for a business combination may be adversely affected by the COVID-19 outbreak and geopolitical conditions, such as the invasion of Ukraine by Russia, which create market volatility and disruptions[167][171] - There is a risk the company could be deemed an investment company under the Investment Company Act, which could force liquidation[174] - To mitigate this, the company may liquidate the securities in the Trust Account and hold cash, which would likely result in minimal to no interest income[176][177] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities - None[180] Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[181] Mine Safety Disclosures This item is not applicable to the company - Not applicable[182] Other Information The company reports no other information - None[183] Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Chief Executive Officer and Chief Financial Officer as required by the Sarbanes-Oxley Act, and XBRL data files - Exhibits filed include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, along with XBRL Instance Documents and related taxonomy files[185]