Pyrophyte Acquisition (PHYT) - 2023 Q1 - Quarterly Report

PART I Condensed Financial Statements The unaudited condensed financial statements for Pyrophyte Acquisition Corp. as of March 31, 2023, present the company's financial position with $212.2 million in assets and a $1.0 million net income Condensed Balance Sheets As of March 31, 2023, total assets increased to $212.2 million, total liabilities rose to $12.7 million, and the shareholders' deficit widened to $12.4 million Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | Assets | | | | Cash | $0.66 | $13.37 | | Investments and cash held in Trust Account | $211,998.82 | $209,651.19 | | Total Assets | $212,239.08 | $210,012.49 | | Liabilities & Equity | | | | Total Liabilities | $12,725.93 | $11,504.35 | | Class A ordinary shares subject to possible redemption | $211,898.81 | $209,551.19 | | Total shareholders' deficit | ($12,385.66) | ($11,043.05) | Condensed Statements of Operations For the three months ended March 31, 2023, net income was $1,005,015, primarily driven by gains on Trust Account investments, partially offset by warrant liability losses and administrative expenses Condensed Statements of Operations Highlights (in US Dollars) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | General and administrative expenses | $432,765 | $1,333,598 | | Change in fair value of derivative warrant liabilities | ($909,844) | $2,376,371 | | Gain on investments held in Trust Account | $2,347,624 | $76,359 | | Net income | $1,005,015 | $1,119,132 | | Basic and diluted net income per share | $0.04 | $0.04 | Condensed Statements of Cash Flows For the three months ended March 31, 2023, net cash used in operating activities significantly decreased to $12,714, resulting in an ending cash balance of $658 - Net cash used in operating activities was $12,714 for the three months ended March 31, 2023[23] - The ending cash balance was $658 as of March 31, 2023, compared to $731,560 as of March 31, 2022[23] Notes to Unaudited Condensed Financial Statements The notes detail the company's blank check status, significant accounting policies, the business combination deadline extension, and management's going concern assessment - The company is a blank check company formed to effect a Business Combination and has not commenced any operations as of March 31, 2023[25][26] - On April 24, 2023, shareholders approved extending the business combination deadline from April 29, 2023, to April 29, 2024[36] - In connection with the extension vote, holders of 11,151,163 Class A shares redeemed their shares for an aggregate of approximately $117 million, reducing the Trust Account balance to about $95 million[36] - Management has determined that liquidity conditions and the proximity to the liquidation date raise substantial doubt about the Company's ability to continue as a going concern[46] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, Q1 2023 financial performance, the business combination deadline extension, and the going concern assessment - The company is a blank check company seeking a business combination with a target in the energy transition and decarbonization sector[113] Results of Operations Summary (in US Dollars) | Period | Net Income | Key Drivers | | :--- | :--- | :--- | | Q1 2023 | $1,005,015 | Gain on investments held in Trust Account ($2.35M), offset by G&A expenses ($0.43M) and loss on warrant liabilities ($0.91M) | | Q1 2022 | $1,119,132 | Gain on warrant liabilities ($2.38M), offset by G&A expenses ($1.33M) | - Subsequent to the quarter end, on April 24, 2023, shareholders approved an extension for the initial business combination to April 29, 2024. This led to redemptions of 11,151,163 Class A shares for approximately $117 million[148][149] - Management has determined that liquidity conditions and the proximity to the liquidation date raise substantial doubt about the Company's ability to continue as a going concern[129] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the Company is not required to provide quantitative and qualitative disclosures about market risk[153] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2023, due to a material weakness in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of March 31, 2023[155] - A material weakness exists in internal control over financial reporting related to the accounting for accruals, contractual arrangements, complex financial instruments, and remeasurement of redeemable shares[156] - No changes were made to internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[157] PART II–OTHER INFORMATION Legal Proceedings The company reports no legal proceedings - There are no legal proceedings to report[161] Risk Factors No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors disclosed in the Annual Report on Form 10-K filed on April 12, 2023, have occurred[162] Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or use of proceeds - None[163] Exhibits The report lists several exhibits, including a Convertible Promissory Note, CEO/CFO certifications, and Inline XBRL data files - Key exhibits include a Convertible Promissory Note with the Sponsor, CEO/CFO certifications (Sections 302 and 906), and XBRL files[168]