Financial Performance - For the three months ended March 31, 2024, the company reported a net loss of $113,190, which included a loss from operations of $237,696 and interest earned of $631,967 [210]. - For the three months ended March 31, 2023, the company reported a net income of $1,389,974, which included a loss from operations of $318,804 and interest earned on investments of $2,304,389 [244]. - The company has incurred increased expenses due to being a public company, including legal and financial reporting costs [243]. Capital Structure - The company generated gross proceeds of $200 million from the sale of 20,000,000 Units at an offering price of $10.00 per Unit during the Initial Public Offering [200]. - The company raised $7 million from the sale of 4,666,667 Private Placement Warrants at a price of $1.50 per warrant [173]. - The company is authorized to issue up to 200,000,000 Class A Ordinary Shares, with a par value of $0.0001 per share [188]. - The company has 5,794,628 Class A Ordinary Shares issued and outstanding, with 5,194,628 of those shares subject to possible redemption [188]. - The company issued 600,000 Class A Ordinary Shares upon the conversion of Class B Ordinary Shares, subject to restrictions on transfer until certain conditions are met [209]. - As of October 19, 2023, shareholders redeemed 16,045,860 Public Shares for approximately $10.54 per share, totaling an aggregate redemption amount of approximately $169.1 million [240]. - Following the Sponsor Handover and 2023 Redemptions, there were 5,794,628 Class A Ordinary Shares and 4,710,122 Class B Ordinary Shares outstanding, with the Legacy Sponsor and New Sponsor holding approximately 21.11% and 29.44% of the shares, respectively [242]. Business Combination - The company will only complete a Business Combination if it has net tangible assets of at least $5,000,001 immediately prior to or upon closing [175]. - The company will proceed with a Business Combination only if a majority of the outstanding shares voted are in favor of it [175]. - The company has until July 19, 2024, to consummate a Business Combination, failing which it will face mandatory liquidation [216]. - The company has broad discretion regarding the application of net proceeds from the Initial Public Offering and Private Placement, primarily intended for consummating a Business Combination [202]. - The company has received waivers from Citigroup Global Markets Inc. and J.P. Morgan Securities LLC regarding deferred underwriting fees related to any Business Combination [177]. - The company has received waivers from underwriters regarding deferred underwriting fees, releasing $7,434,171 from the Trust Account [221]. - The company may seek to extend its Combination Period, which would require shareholder approval and could impact its Trust Account [208]. - The SEC's new rules for SPACs, effective July 1, 2024, may materially affect the company's ability to complete its initial Business Combination [237]. Cash and Liabilities - As of March 31, 2024, the company held cash of $29,982 and current liabilities of $918,123, indicating a working capital deficit of $813,740 [213]. - The company has borrowed an aggregate of $125,000 under the WCL Promissory Note as of March 31, 2024 [246]. - The company instructed to liquidate investments in the Trust Account, holding funds in an interest-bearing demand deposit account instead [247]. Investments and Fair Value - The fair value of Private Placement Warrants as of March 31, 2024, is $444,550, while the fair value of Public Warrants is $651,375 [192]. - The fair value of 749,810 Class B Ordinary Shares was estimated at $3,444,008, or an average of $4.59 per share, as of October 19, 2023 [255]. - The company entered into a Polar Subscription Agreement for a potential investment of up to $1,500,000, of which $750,000 had been drawn as of March 31, 2024 [214]. Internal Controls and Advisory - The company identified a material weakness in internal control over financial reporting, which has been remediated through enhanced processes and third-party consultations [287]. - The company entered into financial advisory agreements with success fees ranging from $50,000 to $1,250,000, which were terminated in August 2023 [252]. Other Financial Activities - The underwriters of the Initial Public Offering exercised an Over-Allotment Option, generating additional gross proceeds of $12,404,880 [220]. - The company has incurred significant costs in pursuit of its initial Business Combination, with ongoing liquidity needs to cover operational expenses and due diligence [215]. - The company has entered into financial advisory agreements with success fees ranging from $50,000 to $1,250,000, which were terminated in August 2023 [252].
pass Digital Acquisition (CDAQ) - 2024 Q1 - Quarterly Report