TLGY Acquisition (TLGY) - 2021 Q4 - Annual Report

Part I Business TLGY Acquisition Corporation is a SPAC focused on global biopharma or technology-enabled B2C business combinations, excluding China, with a 15-24 month completion timeline - The company is a newly incorporated blank check company formed for effecting a merger, share exchange, asset acquisition, or similar business combination[21] - The company targets global biopharma or technology-enabled business-to-consumer (B2C) industries, explicitly excluding entities with principal operations in China, Hong Kong, or Macau[22][25] - The company has 15 months from December 3, 2021, to complete an initial business combination, extendable up to 24 months under certain conditions[32][52][99] - The initial business combination target must have a fair market value of at least 80% of the net assets held in the trust account[33] - Public shareholders can redeem their Class A ordinary shares for cash upon business combination completion, with an anticipated initial redemption price of $10.20 per share[78] Risk Factors The company, as a smaller reporting entity, highlights risks including its early-stage nature, business combination uncertainty, potential conflicts of interest, and trust account fund protection issues - The company is an early-stage entity with no revenue, facing risks in selecting a suitable target and completing a business combination within the timeframe[128] - Potential conflicts of interest exist for officers and directors due to time allocation challenges and other business interests[128] - Funds in the trust account may not be protected against third-party claims or bankruptcy, and an active market for the company's securities may not develop[128] Unresolved Staff Comments The company confirms the absence of any unresolved staff comments - No unresolved staff comments are reported[124] Properties The company owns no real estate or material physical properties, with its principal executive office in Wilmington, Delaware - The company owns no real estate or physical properties, with its principal executive office located in Wilmington, Delaware[125] Legal Proceedings No material litigation, arbitration, or governmental proceedings are pending against the company or its management team - No material litigation, arbitration, or governmental proceedings are pending against the company or its management[126] Mine Safety Disclosures This item is not applicable to the company's operations - This disclosure item is not applicable to the company[127] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, Class A shares, and warrants trade on Nasdaq, with no dividends paid, and details IPO and private placement proceeds totaling $234.6 million placed in a trust account - The company's securities, including Units (TLGYU), Class A ordinary shares (TLGY), and redeemable warrants (TLGYW), trade on the Nasdaq Global Market[131] - The company has not paid and does not plan to pay any cash dividends prior to completing a business combination[133] IPO and Private Placement Proceeds | Offering | Units/Warrants Sold | Price per Unit/Warrant | Gross Proceeds | Date | | :--- | :--- | :--- | :--- | :--- | | Initial Public Offering | 20,000,000 Units | $10.00 | $200,000,000 | Dec 3, 2021 | | Over-Allotment Option | 3,000,000 Units | $10.00 | $30,000,000 | Dec 8, 2021 | | Private Placement Warrants | 10,659,500 Warrants | $1.00 | $10,659,500 | Dec 3, 2021 | | Additional Private Warrants | 600,000 Warrants | $1.00 | $600,000 | Dec 8, 2021 | - A total of $234,600,000 from the IPO and private placement proceeds was placed in the trust account[142] Management's Discussion and Analysis of Financial Condition and Results of Operations As a blank check company with no revenue, the company reported $2,162,761 net income from inception to December 31, 2021, driven by a non-cash gain on derivative warrants, and holds $234.6 million in its trust account - The company has not engaged in operations or generated revenue, with activities limited to organizational tasks and IPO preparation[146] Results of Operations (Inception to Dec 31, 2021) | Item | Amount ($) | Note | | :--- | :--- | :--- | | Net Income | $2,162,761 | | | Change in Fair Value of Derivative Warrant Liabilities | $3,436,685 | Non-cash gain | | General and Administrative Costs | ($816,357) | Expense | | Offering Costs Allocated to Warrant Liability | ($442,567) | Expense | Liquidity and Capital Resources (as of Dec 31, 2021) | Item | Amount ($) | | :--- | :--- | | Investments held in Trust Account | $234,600,000 | | Cash held outside Trust Account | $1,452,706 | - The company pays its sponsor $15,000 per month for administrative services, commencing November 30, 2021[154] - Critical accounting policies include accounting for warrant liabilities as derivatives at fair value and classifying Class A ordinary shares subject to redemption as temporary equity[157][158][160] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing disclosures under this item - The company, as a smaller reporting entity, is not required to provide information under this item[167] Financial Statements and Supplementary Data This section refers to the comprehensive financial statements and supplementary data located after Item 15 of the report - The company's financial statements and supplementary data are included after Item 15 of the Form 10-K[168] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants regarding financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure are reported[169] Controls and Procedures As of December 31, 2021, disclosure controls were effective, with no management report on internal control over financial reporting due to transition period, and no material changes reported - Management concluded that disclosure controls and procedures were effective as of December 31, 2021[171] - A management report on internal control over financial reporting is not included, as permitted for newly public companies[172] - No material changes in internal control over financial reporting occurred during the period[173] Part III Directors, Executive Officers and Corporate Governance The company's leadership includes Chairman and CEO Jin-Goon Kim, a five-member board with three independent directors, and established audit, compensation, and governance committees, with potential conflicts of interest disclosed - The executive team comprises Jin-Goon Kim (Chairman & CEO), Theron E. Odlaug (Co-President), and Steven Norman (Co-President & CFO)[176] - The five-member board of directors includes three independent directors: Shrijay Vijayan, Donghyun Han, and Hyunchan Cho[187][188] - The board has three standing committees—Audit, Compensation, and Nominating and Corporate Governance—all composed of independent directors[192] - Potential conflicts of interest are disclosed due to officers' and directors' obligations to other entities and non-exclusive time commitment to the company[209][210][211] Executive Compensation Executive compensation is limited to $3,000 monthly fees for Co-Presidents and $15,000 monthly for sponsor administrative services, with other officers and directors receiving only expense reimbursements prior to a business combination - Co-Presidents Theron E. Odlaug and Steven Norman each receive a monthly fee of $3,000, commencing December 3, 2021[218] - The sponsor, officers, and directors are reimbursed for out-of-pocket expenses, with no other compensation paid prior to the initial business combination[218] - Post-business combination management compensation will be determined by the new board and is currently unknown[219] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of March 30, 2022, the sponsor, TLGY Sponsors LLC, holds 18.6% of outstanding shares, with all officers and directors owning 18.9% as a group, and two external entities holding over 5% each Beneficial Ownership as of March 30, 2022 | Name of Beneficial Owner | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | | TLGY Sponsors LLC / Jin-Goon Kim | 5,344,700 | 18.6% | | All officers and directors as a group | 5,434,700 | 18.9% | | Saba Capital Management, L.P. | 1,987,710 | 6.9% | | Castle Creek Arbitrage, LLC | 1,786,898 | 6.2% | Certain Relationships and Related Transactions, and Director Independence Related party transactions include the sponsor's purchase of 5,750,000 founder shares for $25,000 and 11,259,500 private warrants for $11,259,500, a repaid $300,000 loan, and $15,000 monthly administrative fees - The sponsor purchased 5,750,000 founder shares for $25,000[227] - The sponsor purchased 11,259,500 private placement warrants at $1.00 per warrant[228] - The sponsor provided a $300,000 loan for initial expenses, fully repaid upon IPO closing[231] - The company pays the sponsor $15,000 per month for administrative services under an agreement[229] Principal Accounting Fees and Services For fiscal year 2021, the company incurred $105,063 in total audit fees from its independent accounting firm, with all services pre-approved by the audit committee Accounting Fees for Fiscal Year 2021 | Fee Category | Amount ($) | | :--- | :--- | | Audit Fees | $105,063 | | Audit-Related Fees | $0 | | Tax Fees | $0 | | All Other Fees | $0 | | Total Fees | $105,063 | Part IV Exhibits, Financial Statements and Financial Statement Schedules This section provides an index of financial statements, schedules, and exhibits filed with the report, including key agreements and material contracts - An index of all financial statements, schedules, and exhibits filed with the report is provided[241][242][243] Form 10-K Summary This item is not applicable to the company - This item is not applicable[247] Financial Statements Report of Independent Registered Public Accounting Firm Marcum Bernstein & Pinchuk LLP issued an unqualified audit opinion on the company's financial statements for the period from inception to December 31, 2021, affirming fair presentation in conformity with U.S. GAAP - The auditor, Marcum Bernstein & Pinchuk LLP, provided an unqualified audit opinion on the financial statements[256] Balance Sheet As of December 31, 2021, total assets were $236.7 million, with $234.6 million in the trust account, total liabilities were $19.4 million, and a shareholders' deficit of $17.3 million due to redeemable Class A shares Balance Sheet as of December 31, 2021 | Category | Amount (in $) | | :--- | :--- | | Total Assets | 236,667,464 | | Investments held in Trust Account | 234,600,000 | | Cash | 1,452,817 | | Total Liabilities | 19,408,666 | | Derivative warrant liabilities | 10,580,041 | | Deferred underwriting commission | 8,650,000 | | Class A ordinary shares subject to possible redemption | 234,000,000 | | Total Shareholders' Deficit | (17,341,202) | Statement of Operations From inception to December 31, 2021, the company reported a net income of $2,162,761, primarily due to a $3,436,685 non-cash gain from derivative warrants, offsetting expenses Statement of Operations (Inception to Dec 31, 2021) | Item | Amount (in $) | | :--- | :--- | | Total Expenses | (831,357) | | Change in fair value of derivative warrants | 3,436,685 | | Offering costs allocated to warrant liability | (442,567) | | Net Income | 2,162,761 | Statement of Cash Flows From inception to December 31, 2021, net cash used in operations was $691,367, investing activities used $234.6 million, financing provided $236.7 million, resulting in an ending cash balance of $1,452,817 Statement of Cash Flows (Inception to Dec 31, 2021) | Category | Amount (in $) | | :--- | :--- | | Net Cash Used In Operating Activities | (691,367) | | Net Cash Used In Investing Activities | (234,600,000) | | Net Cash Provided By Financing Activities | 236,744,184 | | Net change in cash | 1,452,817 | | Cash at end of period | 1,452,817 | Notes to Financial Statements The notes detail the company's SPAC formation, IPO, private placements, 15-24 month business combination timeline, accounting policies for redeemable Class A shares and derivative warrants, and related-party transactions - The company must complete a Business Combination within 15 months from IPO closing, extendable up to 24 months, or face liquidation and redemption of public shares[285] - Public and private placement warrants are accounted for as derivative liabilities at fair value, with a fair value of $14,016,726 at inception decreasing to $10,580,041 by year-end[313][346][350] - Class A ordinary shares subject to redemption are classified as temporary equity, with carrying value adjusted to the $10.20 per share redemption value at each reporting period[280][300] - Deferred underwriting fees of $8,650,000 are contingent upon the consummation of a Business Combination[276][330][331]