TLGY Acquisition (TLGY) - 2022 Q4 - Annual Report

Part I Item 1. Business TLGY Acquisition Corporation is a blank check company formed in May 2021 to effect a business combination, focusing on global biopharma or technology-enabled B2C industries, excluding China, leveraging management's private equity and operational expertise Overview TLGY Acquisition Corporation, a blank check company established in May 2021, has no operating revenues and targets global biopharma or technology-enabled B2C industries, excluding China, emphasizing its management's expertise - The company is a blank check company incorporated in May 2021, with no operating revenues to date[19] - Target industries include biopharma or technology-enabled B2C sectors globally, with a specific exclusion of entities with principal business operations in China (including Hong Kong and Macau)[20] - The management team's expertise in private equity and transformational operations, particularly founder Jin-Goon Kim's track record, is highlighted as a key differentiator[21][22] Competitive Differentiation The company aims to generate attractive risk-adjusted returns by leveraging its management team's ability to identify, acquire, and operate businesses, focusing on global or Asia-linked biopharma or technology-driven consumer businesses with a private equity-style value creation approach - The company's mission is to generate attractive risk-adjusted returns by identifying, acquiring, and operating businesses that benefit from management's involvement[24] - Business strategy focuses on promising global or Asia-linked companies in biopharma or technology-enabled consumer sectors, excluding China (including Hong Kong and Macau)[24] - The team possesses decades of investment expertise, deep industry sourcing capabilities, and a proven track record in operational leadership and value creation[25] Business Combination Criteria The company's business combination criteria emphasize targets benefiting from macro tailwinds and enabling trends, with opportunities for value creation through transformation, focusing on biopharma and technology-enabled consumer markets, leveraging Asian innovation and cross-border opportunities, while also seeking public market benefits for targets - Target businesses should benefit from major industry inflection points, market demand changes, or industry structure shifts, with a focus on biopharma (e.g., rare diseases, CNS disorders, aging remedies) and technology-enabled consumer companies[28][29] - The company seeks targets with strong businesses and management teams that can benefit from global best-practices and proven operational playbooks for accelerated growth and profitability[28] - Leveraging its team's roots in key Asian markets, the company aims to expand targets' Asia presence or help Asian companies expand globally, capitalizing on uneven technological and business model development across regions[29] Ability to Extend Time to Complete Business Combination The company has 15 months from December 3, 2021, to complete an initial business combination, with potential extensions up to 21 months (Paid Extension Period) and an automatic three-month extension (Automatic Extension Period), where paid extensions require a monthly deposit of $759,000 ($0.033 per share) into the trust account by the sponsor or its affiliates, which are non-interest bearing loans repayable upon business combination completion - The company has 15 months from December 3, 2021, to complete an initial business combination[32] - The period can be extended up to six times by one month each (total 21 months) if requested by the sponsor or its affiliates, requiring a $759,000 ($0.033 per share) monthly deposit into the trust account[32] - An automatic three-month extension is available if a preliminary proxy statement or similar filing for a business combination is made during the initial or paid extension periods, without requiring additional deposits[32] Initial Business Combination The company must consummate an initial business combination with a fair market value of at least 80% of the net assets in the trust account, with the board determining fair market value, potentially with an independent firm's opinion, and the post-transaction company typically owning 100% of the target, but potentially acquiring less (at least 50% voting securities or controlling interest) if necessary, while conflicts of interest may arise due to management's ownership of founder shares and warrants or other fiduciary obligations - The initial business combination must have a fair market value equal to at least 80% of the net assets held in the trust account[33] - The post-transaction company is anticipated to own or acquire 100% of the target, but may acquire less (50% or more of voting securities or a controlling interest) to meet target objectives or for other reasons[35] - Conflicts of interest may exist for management and directors due to their ownership of founder shares and private placement warrants, or existing fiduciary/contractual obligations to other entities[38][39][40] Sourcing of Potential Business Combination Targets The management team's extensive operating and transaction experience, coupled with a broad network of contacts, is expected to provide a substantial number of potential business combination targets, with opportunities from solicited and unsolicited sources, including investment market participants, private equity funds, and divestitures, while affiliated transactions are permitted but require an independent fairness opinion - The management team's significant operating and transaction experience and relationships are expected to provide a substantial number of potential initial business combination targets[42] - Target candidates will be sourced from various unaffiliated sources (investment bankers, private equity funds) and through the management team's proprietary network[43] - Affiliated business combinations are permitted but require an opinion from an independent investment banking or valuation firm that the transaction is fair to the company from a financial point of view[44] Status as a Public Company The company's public status offers target businesses an alternative to traditional IPOs, potentially providing a more expeditious and cost-effective path to public markets, greater access to capital, and an enhanced corporate profile, while being classified as an 'emerging growth company' and a 'smaller reporting company' allows for reduced disclosure obligations - Being an existing public company offers target businesses an alternative to traditional IPOs, potentially being more expeditious and cost-effective[49] - Public company status can provide greater access to capital, management incentives, and an augmented corporate profile[50] - The company is an 'emerging growth company' and a 'smaller reporting company,' which allows for certain reduced disclosure obligations[52][53] Effecting Our Initial Business Combination The company intends to use proceeds from its IPO, private placement warrants, and potential future financings (debt or equity) to complete its initial business combination within 15 months (extendable to 21 or 24 months), potentially targeting financially unstable or early-stage businesses, which carry inherent risks, and has not yet identified a specific target, possibly needing additional financing if the purchase price exceeds available trust funds - The company plans to effectuate its initial business combination using cash from IPO proceeds, private placement warrants, and potentially future equity or debt offerings[54][58] - The deadline for completing a business combination is 15 months from December 3, 2021, with potential extensions up to 21 months (Paid Extension Period) or an automatic three-month extension (Automatic Extension Period)[55] - The company has not entered into a business combination agreement with any specific target, and there is no current basis for investors to evaluate target merits or risks[57] Sources of Target Businesses Potential target businesses are expected to be identified through various unaffiliated sources, including investment bankers and private investment funds, as well as through the management team's extensive network, while the company may engage finders for opportunities not otherwise available, but its sponsor, officers, or directors will not receive finder's fees for services related to the business combination - Target business candidates are anticipated from unaffiliated sources like investment bankers and private investment funds, and through the management team's network[60] - The company may engage finders for opportunities, with fees tied to transaction completion, but the sponsor or affiliated officers/directors will not receive such fees for services related to the business combination[60] - Monthly payments of $15,000 are made to the sponsor for office space, utilities, and administrative support[60] Evaluation of a Target Business and Structuring of Our Initial Business Combination The evaluation process for a target business involves due diligence, including meetings with management, document reviews, interviews, and facility inspections, with uncertain time and costs, and expenses incurred for uncompleted combinations resulting in losses, reducing funds for future acquisitions - Due diligence for target businesses includes meetings with management, document reviews, customer/supplier interviews, and facility inspections[62] - The time and costs for selecting, evaluating, and completing a business combination are uncertain[63] - Costs incurred for uncompleted business combinations will result in losses and reduce funds available for other acquisitions[63] Lack of Business Diversification Post-business combination, the company's success may depend entirely on a single business, leading to a lack of diversification, which could expose the company to significant adverse impacts from negative economic, competitive, and regulatory developments within that specific industry, and reliance on a limited number of products or services - After the initial business combination, the company's success may depend entirely on a single business, leading to a lack of diversification[64] - This lack of diversification could subject the company to negative economic, competitive, and regulatory developments in a single industry[69] - The company may become dependent on the marketing and sale of a single product or a limited number of products or services[69] Limited Ability to Evaluate the Target's Management Team The company's assessment of a target business's management may not always be accurate, and future management may lack the necessary skills for a public company, while the future roles of the company's management team post-combination are uncertain, and there's no guarantee that key personnel will remain or that additional managers can be recruited effectively - The assessment of a target business's management may not always be correct, and future management may lack the skills to manage a public company[65] - The future role of the company's management team members in the target business is uncertain, and they may not devote full efforts post-combination[65] - There is no assurance that key personnel will remain or that additional managers with requisite skills can be recruited[66][67] Shareholders May Not Have the Ability to Approve Our Initial Business Combination The company may conduct redemptions without a shareholder vote, but will seek approval if required by law or NASDAQ rules, or for business reasons, with shareholder approval typically required if the company issues shares exceeding 20% of outstanding shares, if a related party has a significant interest, or if a change of control occurs - The company may conduct redemptions without a shareholder vote, but will seek approval if required by law, NASDAQ rules, or for business reasons[68] - Shareholder approval is required if the company issues ordinary shares equal to or exceeding 20% of outstanding shares, if a director, officer, or substantial security holder has a 5% or greater interest in the target, or if the transaction results in a change of control[70] Permitted Purchases of Our Securities The sponsor, initial shareholders, founder, directors, officers, or their affiliates may purchase shares or public warrants in privately negotiated transactions or on the open market, either before or after the business combination, to increase the likelihood of shareholder approval, satisfy closing conditions, or reduce outstanding public warrants, though such actions could reduce the public float and beneficial holders, potentially affecting market liquidity - The sponsor, initial shareholders, founder, directors, officers, or their affiliates may purchase shares or public warrants in privately negotiated transactions or on the open market[71] - The purpose of such purchases could be to vote in favor of the business combination, satisfy closing conditions, or reduce the number of public warrants outstanding[73] - These purchases could reduce the public 'float' of Class A ordinary shares or public warrants and the number of beneficial holders, potentially impacting market quotation, listing, or trading[74] Corporate Information The company's principal executive office is in Wilmington, Delaware, and as a Cayman Islands exempted company, it benefits from a 20-year tax exemption on profits, income, gains, and appreciations, while its status as an 'emerging growth company' and a 'smaller reporting company' allows for reduced disclosure obligations - The principal executive office is located at 4001 Kennett Pike, Suite 302, Wilmington, Delaware 19807, U.S.A.[76] - The company is a Cayman Islands exempted company, with a 20-year tax exemption from the Cayman Islands government on profits, income, gains, and appreciations[79] - As an 'emerging growth company' and 'smaller reporting company,' it benefits from relaxed reporting requirements, including delayed adoption of new accounting standards[80][81][83] Redemption Rights for Public Shareholders upon Completion of Our Initial Business Combination Public shareholders have the right to redeem all or a portion of their Class A ordinary shares upon completion of the initial business combination, with the redemption price being a per-share cash amount equal to the aggregate amount in the trust account (initially $10.20 per public share), including interest, divided by the number of outstanding public shares, while the sponsor and initial shareholders waive redemption rights for their founder shares and most public shares - Public shareholders can redeem all or a portion of their Class A ordinary shares upon completion of the initial business combination[84] - The redemption price is a per-share cash amount equal to the aggregate amount in the trust account (initially $10.20 per public share), including interest, divided by the number of outstanding public shares[84] - The sponsor, officers, directors, and other initial shareholders waive their redemption rights for their founder shares and any public shares they may hold (except for the underwriters' representative)[84] Distribution of Distributable Redeemable Warrants to Holders of Class A Ordinary Shares Not Electing Redemption At the distribution time, a pro-rata number of distributable redeemable warrants (equal to 5,750,000 warrants multiplied by one-fourth) will be distributed only to holders of Class A ordinary shares who do not elect redemption, with the number of warrants per public share contingent on the aggregate number of redeemed shares, but at least one-fourth of a warrant per non-redeemed share, and these warrants are identical to detachable redeemable warrants and will be tradable upon distribution - A pro-rata distribution of distributable redeemable warrants will be made to holders of Class A ordinary shares who do not elect redemption[85] - The total number of warrants distributed will be 5,750,000 multiplied by one-fourth, with at least one-fourth of a warrant per non-redeemed Class A ordinary share[85] - These distributable redeemable warrants are identical to detachable redeemable warrants and will be tradable under the same stock symbol upon distribution[86] Limitations on Redemptions Redemptions are limited to ensure the company's net tangible assets remain above $5,000,001, and a proposed business combination may also impose minimum cash requirements, where if the aggregate cash needed for redemptions and cash conditions exceeds available funds, the business combination will not proceed, and no shares will be redeemed, while the company may raise additional funds through equity-linked securities or loans to meet these requirements, and public shareholders are restricted from redeeming more than 15% of the shares sold in the IPO without prior consent - Redemptions are limited such that net tangible assets must not fall below $5,000,001[87][96] - A proposed business combination may include minimum cash requirements for consideration, working capital, or other conditions[87][96] - Public shareholders are restricted from redeeming more than an aggregate of 15% of the shares sold in the IPO without prior consent, to prevent large blocks of shares from unreasonably blocking a business combination[97] Manner of Conducting Redemptions Redemptions can be conducted either in connection with a shareholder meeting to approve the business combination or via a tender offer, at the company's discretion, where if shareholder approval is sought, proxy materials will be distributed, and if a tender offer is used, offer documents will be filed with the SEC, and shareholder approval for a business combination requires an ordinary resolution (majority vote) under Cayman Islands law, with founder shares voting in favor - Redemptions can be conducted either through a general meeting for business combination approval or via a tender offer, at the company's discretion[88] - If shareholder approval is sought, proxy materials will be distributed, and an ordinary resolution (majority vote) is required, with founder shares voting in favor[91][92] - If a tender offer is used, it will remain open for at least 20 business days, and tender offer documents will be filed with the SEC[94] Delivering Share Certificates in Connection with a Tender Offer or Redemption Rights Public shareholders exercising redemption rights must deliver their share certificates to the transfer agent, either physically or electronically via DWAC, prior to the date specified in proxy or tender offer documents (up to two business days before a scheduled vote), ensuring a redemption election is irrevocable once the business combination is approved, differing from past practices where shareholders had an 'option window' post-approval - Public shareholders must deliver share certificates to the transfer agent (physically or via DWAC) prior to the specified date in proxy or tender offer documents to exercise redemption rights[99] - This delivery requirement, up to two business days before a scheduled vote, ensures that a redeeming shareholder's election is irrevocable once the business combination is approved[99][101] - If the business combination is not approved or completed, shares delivered for redemption will be promptly returned[102] Redemption of Public Shares and Liquidation If No Initial Business Combination If no initial business combination is completed within 15 months (or up to 24 months with extensions) from the IPO closing, the company will cease operations, redeem public shares at a per-share price from the trust account (less taxes and dissolution expenses), and then liquidate, with the sponsor waiving rights to liquidating distributions for founder shares, and creditor claims potentially reducing the redemption amount, though the sponsor has agreed to indemnify the trust account against certain third-party claims, its ability to satisfy these obligations is not guaranteed - If no business combination is completed within 15 months (or up to 24 months with extensions) from the IPO closing, the company will liquidate[104] - Public shares will be redeemed at a per-share price from the trust account, including interest (less taxes and up to $100,000 for dissolution expenses)[104] - The sponsor has agreed to indemnify the trust account against certain third-party claims to ensure public shareholders receive at least $10.20 per share, but its ability to satisfy these obligations is not assured[109][111] Competition The company faces competition from other SPACs, private equity groups, public companies, and operating businesses for target acquisitions, with many competitors possessing greater financial, technical, and human resources, and the company's limited financial resources and potential dilution from warrants may put it at a competitive disadvantage in negotiating business combinations - The company faces competition from other SPACs, private equity groups, public companies, and operating businesses for target acquisitions[116] - Many competitors possess similar or greater financial, technical, human, and other resources[116] - Limited financial resources and potential dilution from warrants may place the company at a competitive disadvantage[116] Facilities The company's principal executive office is located at 4001 Kennett Pike, Suite 302, Wilmington, Delaware 19807, U.S.A., and the current office space is considered adequate for its operations - The principal executive office is at 4001 Kennett Pike, Suite 302, Wilmington, Delaware 19807, U.S.A.[117] - The current office space is considered adequate for current operations[117] Employees The company currently has three executive officers who are not obligated to devote specific hours but will dedicate necessary time to affairs until a business combination is completed, and the company does not intend to have full-time employees before the completion of its initial business combination - The company has three executive officers[118] - These officers are not obligated to devote specific hours but will dedicate time as needed until the initial business combination is completed[118] - The company does not intend to have any full-time employees prior to the completion of its initial business combination[118] Periodic Reporting and Financial Information The company is subject to Exchange Act reporting obligations, including filing annual, quarterly, and current reports with the SEC, which will include audited financial statements, and must provide audited financial statements of prospective target businesses, prepared in accordance with GAAP or IFRS, which may limit the pool of potential targets, while as an 'emerging growth company,' it benefits from certain exemptions, including delayed adoption of new accounting standards - The company has reporting obligations under the Exchange Act, requiring annual, quarterly, and current reports with the SEC, including audited financial statements[120] - Audited financial statements of prospective target businesses, prepared in accordance with GAAP or IFRS, must be provided, which may limit the pool of potential targets[121] - As an 'emerging growth company,' it can take advantage of the extended transition period for complying with new or revised financial accounting standards[124][125] Item 1A. Risk Factors As a smaller reporting company, the company is not required to include a full list of risk factors in this report but refers to its prospectus, with key risks including its early stage with no revenue, inability to select a suitable target or complete a business combination within the timeframe, potential conflicts of interest for officers/directors, and the impact of proposed SEC rules on SPACs, which could increase costs, time, or lead to earlier liquidation - The company is an early-stage company with no revenue or basis to evaluate its ability to select a suitable business target[129] - Risks include the inability to complete an initial business combination within the prescribed timeframe, potential conflicts of interest for officers and directors, and the trust account funds not being protected against third-party claims or bankruptcy[129] - Proposed SEC rules relating to SPACs may increase costs and time needed to complete a business combination, potentially causing earlier liquidation and rendering warrants worthless[130][131] Item 1B. Unresolved Staff Comments There are no unresolved staff comments - None[135] Item 2. Properties The company does not own any material real estate or physical properties, with its principal executive offices located at 4001 Kennett Pike, Suite 302, Wilmington, Delaware 19807, U.S.A., which are considered adequate for current operations - The company does not own any real estate or other physical properties materially important to its operations[137] - Principal executive offices are located at 4001 Kennett Pike, Suite 302, Wilmington, Delaware 19807, U.S.A.[137] - The current office space is considered adequate for current operations[137] Item 3. 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 company or any members of its management team[138] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[139] Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's units, Class A ordinary shares, and redeemable warrants are traded on the Nasdaq Global Market under symbols TLGYU, TLGY, and TLGYW, respectively, with limited holders of record as of February 21, 2023, and no cash dividends paid or intended before a business combination, having raised $230 million from its IPO and $11.26 million from private placement warrants, placing $234.6 million in the trust account Market Information The company's units, Class A ordinary shares, and redeemable warrants are listed and traded on the Nasdaq Global Market under the symbols TLGYU, TLGY, and TLGYW, respectively, with units beginning trading on December 1, 2021, and Class A shares and warrants commencing trading on January 21, 2022 - Units, Class A ordinary shares, and redeemable warrants are traded on the Nasdaq Global Market[142] - Trading symbols are TLGYU (Units), TLGY (Class A ordinary shares), and TLGYW (Redeemable warrants)[142] - Units commenced public trading on December 1, 2021, and Class A ordinary shares and redeemable warrants on January 21, 2022[142] Holders of Record As of February 21, 2023, the company had one holder of record for its units, one for Class A ordinary shares, six for Class B ordinary shares, and one for public warrants, excluding beneficial holders whose securities are held by financial institutions Holders of Record (February 21, 2023) | Security Type | Holders of Record | | :---------------------- | :---------------- | | Units | 1 | | Class A Ordinary Shares | 1 | | Class B Ordinary Shares | 6 | | Public Warrants | 1 | - The number of holders of record does not include a substantially greater number of 'street name' or beneficial holders[143] Dividends The company has not paid any cash dividends on its ordinary shares to date and does not intend to do so before completing a business combination, with future dividend payments dependent on revenues, earnings, capital requirements, and financial condition post-combination, and potentially limited by restrictive covenants from any incurred indebtedness - The company has not paid any cash dividends on its ordinary shares to date[144] - It does not intend to pay cash dividends prior to the completion of a business combination[144] - Future dividend payments will be at the discretion of the board and dependent on revenues, earnings, capital requirements, and financial condition post-combination, potentially limited by debt covenants[144] Securities Authorized for Issuance Under Equity Compensation Plans There are no securities authorized for issuance under equity compensation plans - None[145] Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings The company completed its IPO on December 3, 2021, selling 20,000,000 units at $10.00 each, generating $200,000,000, and simultaneously sold 10,659,500 private placement warrants for $10,659,500, with an additional 3,000,000 units and 600,000 private placement warrants sold on December 8, 2021, generating $30,000,000 and $600,000, respectively, totaling $234,600,000 placed in the trust account, and transaction costs included $4,000,000 in underwriting fees and $8,650,000 in deferred underwriting fees - Founder shares and private placement warrants were sold to the sponsor and initial shareholders, exempt from registration under Section 4(a)(2) of the Securities Act[147] IPO and Private Placement Details | Item | Date | Quantity | Price per Unit/Warrant ($) | Gross Proceeds ($) | | :------------------------------ | :---------- | :--------- | :------------------------- | :----------------- | | IPO Units | Dec 3, 2021 | 20,000,000 | $10.00 | $200,000,000 | | Private Placement Warrants | Dec 3, 2021 | 10,659,500 | $1.00 | $10,659,500 | | Over-allotment Units | Dec 8, 2021 | 3,000,000 | $10.00 | $30,000,000 | | Additional Private Placement Warrants | Dec 8, 2021 | 600,000 | $1.00 | $600,000 | - A total of $234,600,000 from the IPO and private placement proceeds was placed in the trust account[153] - Transaction costs included $4,000,000 in underwriting fees paid and $8,650,000 in deferred underwriting fees[152] Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no purchases of equity securities by the issuer or affiliated purchasers - None[154] Item 6. [Reserved] This item is reserved and contains no information Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of the company's financial condition and results of operations, as a blank check company, it has not generated operating revenues but earns interest income from its trust account, reporting a net income of $11,645,768 for the year ended December 31, 2022, primarily driven by a change in fair value of derivative warrant liabilities and interest income, while facing going concern uncertainties due to its limited timeframe to complete a business combination and potential impacts from global events like the COVID-19 pandemic and geopolitical conflicts Overview The company, a blank check entity incorporated in May 2021, aims to complete a business combination using IPO proceeds, private placement warrants, and potential future financings, having not generated operating revenues and expecting to incur significant costs in its pursuit of an initial business combination - The company is a blank check company incorporated on May 21, 2021, for the purpose of effecting a business combination[156] - It has not entered into a business combination agreement with any specific target and has not generated operating revenues[156] - The company expects to incur significant costs in the pursuit of its initial business combination and cannot assure success in raising capital or completing the combination[156] Results of Operations The company has not engaged in operations or generated revenues, with activities focused on organizational tasks and searching for a business combination target, generating non-operating income from interest on trust account funds, and for the year ended December 31, 2022, net income was $11,645,768, primarily due to a gain on derivative warrant liabilities and interest income, partially offset by general and administrative costs - The company has not engaged in operations or generated revenues, focusing on organizational activities and searching for a business combination target[157] Net Income Summary | Metric | Year Ended Dec 31, 2022 ($) | Period May 21 - Dec 31, 2021 ($) | | :----------------------------------------- | :-------------------------- | :------------------------------- | | Net Income | $11,645,768 | $2,162,761 | | Change in fair value of derivative warrant liabilities | $10,128,054 | $3,436,685 | | Interest income on funds held in Trust | $2,901,000 | — | | General and administrative costs | $1,383,286 | $816,357 | Liquidity and Capital Resources As of December 31, 2022, the company had $585,241 in cash outside the trust account and $237,140,621 in investments within the trust account, with these funds intended for identifying target businesses, due diligence, and ultimately completing a business combination, and management acknowledges substantial doubt about the company's ability to continue as a going concern if a business combination is not consummated within the prescribed timeframe, but plans to extend the period Liquidity and Capital Resources (as of Dec 31, 2022) | Item | Amount ($) | | :-------------------------------- | :------------- | | Investments held in Trust Account | $237,140,621 | | Cash held outside Trust Account | $585,241 | - Funds outside the trust account are primarily for identifying and evaluating target businesses, due diligence, and related expenses[163] - Management has determined that the inability to consummate an initial business combination within the 15-month period (or extended period) raises substantial doubt about the company's ability to continue as a going concern, but plans to extend the period[164][165][319] Off-balance Sheet Arrangements; Commitments and Contractual Obligations As of December 31, 2022, the company had no off-balance sheet arrangements, and its contractual obligations primarily include an administrative services agreement with the sponsor, registration rights for certain security holders, and deferred underwriting commissions - As of December 31, 2022, the company did not have any off-balance sheet arrangements[166] - Contractual obligations include an administrative services agreement, registration rights, and deferred underwriting commissions[166][167][168][169] Contractual Obligations The company has an administrative services agreement to pay its sponsor $15,000 per month for office and administrative support, with holders of founder shares, private placement warrants, and certain other warrants having registration rights, and underwriters entitled to $8,650,000 in deferred underwriting commissions, payable upon completion of the initial business combination - The company pays its sponsor $15,000 per month for office space, utilities, secretarial, and administrative support services[167] - Holders of founder shares, private placement warrants, and warrants from working capital/extension loans have registration rights[168] - Deferred underwriting commissions of $8,650,000 are payable to the underwriters upon completion of the initial business combination[169] Critical Accounting Estimates and Policies Critical accounting estimates include the fair value of warrant liabilities, which are classified as liabilities and re-measured at each reporting period, with changes recognized in the statements of operations, and Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to redemption value, while net income per ordinary share is computed using the two-class method, excluding the effect of warrants due to contingent exercise - A critical accounting estimate is the fair value of warrant liabilities, which are classified as liabilities and re-measured at each reporting period[171][172] - Class A ordinary shares subject to possible redemption are classified as temporary equity and adjusted to equal the redemption value at each reporting period[174] - Net income per ordinary share is computed using the two-class method, with the effect of warrants excluded from diluted EPS calculation due to contingent exercise[175][176] Recent Accounting Pronouncements The company adopted ASU No. 2020-06, which simplifies accounting for convertible instruments and equity-linked contracts, effective May 21, 2021, with no material impact on its financial statements, and management does not believe other recently issued, but not yet effective, accounting standards would materially affect its financial statements - The company adopted ASU No. 2020-06, which simplifies accounting for convertible instruments and equity-linked contracts, on May 21, 2021 (inception)[177] - Adoption of ASU 2020-06 did not impact the company's financial position, results of operations, or cash flows[177] - Management does not believe other recently issued, but not yet effective, accounting standards would have a material effect on its financial statements[178] JOBS Act As an 'emerging growth company' under the JOBS Act, the company can take advantage of relaxed reporting requirements, including delaying the adoption of new or revised accounting pronouncements until private companies are required to comply, though this election may make its financial statements not comparable to non-emerging growth companies - As an 'emerging growth company' under the JOBS Act, the company can delay the adoption of new or revised accounting standards until private companies are required to comply[179] - This election means its financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates[179] - The company is evaluating other reduced reporting requirements provided by the JOBS Act, such as exemptions from auditor attestation reports on internal controls and certain executive compensation disclosures[180] Item 7A. 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 - The company is a smaller reporting company and is not required to provide information on quantitative and qualitative disclosures about market risk[181] Item 8. Financial Statements and Supplementary Data This item refers to the financial statements and supplementary data, which are included elsewhere in the report following Item 15 - This information appears following Item 15 of this report on Form 10-K and is included herein by reference[182] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There have been no changes in or disagreements with accountants on accounting and financial disclosure - None[183] Item 9A. Controls and Procedures As of December 31, 2022, the company's principal executive officer and principal financial and accounting officer concluded that its disclosure controls and procedures were effective, and management also assessed and concluded that its internal control over financial reporting was effective as of the same date, while the report does not include an auditor attestation report on internal controls due to the company's emerging growth company status Evaluation of Disclosure Controls and Procedures The principal executive officer and principal financial and accounting officer evaluated the effectiveness of the company's disclosure controls and procedures as of December 31, 2022, concluding that these controls and procedures were effective in ensuring that required information is recorded, processed, summarized, and reported timely - Evaluation of disclosure controls and procedures was conducted by the principal executive officer and principal financial and accounting officer as of December 31, 2022[186] - They concluded that the disclosure controls and procedures were effective[186] Management's Report on Internal Controls Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, and following an evaluation based on the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2022, with an auditor attestation report not included due to the company's emerging growth company status - Management is responsible for establishing and maintaining adequate internal control over financial reporting[187] - Based on an evaluation using the COSO (2013 framework), management concluded that internal control over financial reporting was effective as of December 31, 2022[187] - The report does not include an attestation report from the independent registered public accounting firm due to the company's emerging growth company status[188] Changes in Internal Control over Financial Reporting There were no changes in the company's internal control over financial reporting during the period covered by this report that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting - No material changes in internal control over financial reporting occurred during the reporting period[189] Item 9B. Other Information There is no other information to report under this item - None[190] Item 9C. Other Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[191] Part III Item 10. Directors, Executive Officers and Corporate Governance The company's board of directors consists of five members, including Chairman and CEO Jin-Goon Kim, Co-Presidents Theron E. Odlaug and Steven Norman, and three independent directors, with Dr. Shrijay Vijayan, Donghyun Han, and Hyunchan Cho determined to be independent, and the board has an audit committee, compensation committee, and nominating and corporate governance committee, all composed solely of independent directors, while conflicts of interest may arise due to officers' and directors' other fiduciary duties and ownership of company securities, but the company's amended articles renounce interest in corporate opportunities not expressly offered to them in their company capacity Officers and Directors The company's leadership includes Jin-Goon Kim as Chairman and CEO, Theron E. Odlaug as Co-President, and Steven Norman as Co-President, CFO, and Executive Director, with independent directors Dr. Shrijay Vijayan, Donghyun Han, and Hyunchan Cho, and the team brings extensive experience in private equity, transformational leadership, biopharma, technology, and Asian markets Officers and Directors (as of Report Date) | Name | Age | Position | | :--------------- | :-- | :---------------------------------------- | | Jin-Goon Kim | 55 | Chairman and Chief Executive Officer | | Theron (Ted) E. Odlaug | 73 | Co-President | | Steven Norman | 57 | Co-President; Chief Financial Officer; Executive Director | | Shrijay Vijayan | 55 | Independent Director | | Donghyun Han | 55 | Independent Director | | Hyunchan Cho | 54 | Independent Director | - Jin-Goon Kim has two decades of senior leadership in private equity and as a serial transformational CEO, with notable achievements in value creation across multiple companies[194][196] - Dr. Theron E. Odlaug has over 40 years of experience as a CEO, Board Member, and Senior Executive in pharmaceutical and allied companies[197][198] - Steven Norman is a seasoned Asia-Pacific technology industry executive with over 20 years of experience in corporate turnarounds and growth[199] Number and Terms of Office of Officers and Directors The board comprises five directors, each serving a two-year term, with only Class B ordinary shareholders having the right to appoint directors before or in connection with the initial business combination, and officers are appointed by the board and serve at its discretion, without specific terms - The board of directors consists of five members, each serving a two-year term[204] - Only holders of Class B ordinary shares have the right to appoint directors prior to or in connection with the initial business combination[205] - Officers are appointed by the board and serve at its discretion, not for specific terms[205] Director Independence NASDAQ listing standards require a majority of the board to be independent, and the company's board has determined that Dr. Shrijay Vijayan, Donghyun Han, and Hyunchan Cho meet the definition of an 'independent director' under NASDAQ listing standards and applicable SEC rules - NASDAQ listing standards require a majority of the board of directors to be independent[206] - Dr. Shrijay Vijayan, Donghyun Han, and Hyunchan Cho are determined to be 'independent directors'[206] Officer and Director Compensation Officers and directors have not received cash compensation for services, except for monthly fees of $3,000 each to Theron E. Odlaug and Steven Norman, and $15,000 to the sponsor for administrative services, and they are reimbursed for out-of-pocket expenses, with no other compensation (finder's or consulting fees) paid prior to the business combination, and post-combination, directors or management may receive consulting or management fees, determined by the combined company's board - No cash compensation has been paid to officers or directors for services rendered, except for monthly fees to two co-presidents and the sponsor[207] Monthly Compensation | Recipient | Monthly Fee ($) | Start Date | | :---------------- | :-------------- | :---------- | | Theron E. Odlaug | $3,000 | Dec 3, 2021 | | Steven Norman | $3,000 | Dec 3, 2021 | | TLGY Sponsors LLC | $15,000 | Nov 30, 2021 | - Officers and directors are reimbursed for out-of-pocket expenses incurred on the company's behalf[207] - No other compensation, including finder's or consulting fees, will be paid to the sponsor, officers, or directors prior to the completion of the initial business combination[207][244] Committees of the Board of Directors The board has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee, all composed solely of independent directors, as required by NASDAQ rules, and each committee operates under a board-approved charter detailing its principal functions, such as financial statement oversight, executive compensation review, and director candidate identification - The board of directors has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee[210] - All directors on these committees must be independent, as per NASDAQ rules and Rule 10A-3 of the Exchange Act[210][211][214] - Each committee operates under a board-approved charter detailing its principal functions[211][214][215][216][221][223] Compensation Committee Interlocks and Insider Participation None of the company's officers currently serve, or have served in the past year, as a member of the compensation committee of any entity that has one or more officers serving on the company's board of directors - None of the company's officers currently serve, or in the past year have served, as a member of the compensation committee of any entity that has one or more officers serving on the company's board of directors[224] Section 16(a) Beneficial Ownership Reporting Compliance Based on a review of filed forms, the company believes that during the year ended December 31, 2022, there were no delinquent filers among its officers, directors, and persons beneficially owning more than 10% of its ordinary shares, regarding Section 16(a) reporting compliance - Based on a review of Section 16(a) forms, the company believes there were no delinquent filers during the year ended December 31, 2022[225] Code of Business Conduct and Ethics and Committee Charters The company has adopted a Code of Business Conduct and Ethics applicable to its directors, officers, and employees, filed as an exhibit to this report, with copies of the Code and committee charters available upon request, and any material amendments or waivers to the Code for principal executive, financial, or accounting officers will be disclosed on the company's website - A Code of Business Conduct and Ethics has been adopted, applicable to directors, officers, and employees, and filed as an exhibit[226] - Material amendments or waivers to the Code for principal executive, financial, or accounting officers will be disclosed on the company's website[226] Conflicts of Interest Directors and officers owe fiduciary duties under Cayman Islands law, including acting in good faith and avoiding conflicts of interest, however, many officers and directors have existing fiduciary or contractual obligations to other entities, which may lead to conflicts in allocating time or presenting business opportunities, and the company's amended articles renounce interest in corporate opportunities not expressly offered to individuals solely in their company capacity, while affiliated business combinations are permitted but require an independent fairness opinion - Directors and officers owe fiduciary duties under Cayman Islands law, including acting in good faith and avoiding conflicts of interest[227][230] - Officers and directors have existing fiduciary or contractual obligations to other entities, which may create conflicts in allocating time or presenting business opportunities[229][232][237] - The company's amended articles renounce interest in corporate opportunities not expressly offered to a person solely in their capacity as a director or officer of the company[232] - Affiliated business combinations are permitted but require an independent investment banking or valuation firm's opinion that the transaction is fair to the company from a financial point of view[235] Item 11. Executive Compensation Executive officers Theron E. Odlaug and Steven Norman receive a monthly fee of $3,000 each, and the sponsor receives $15,000 monthly for administrative services, with officers and directors reimbursed for out-of-pocket expenses, and no other compensation, including finder's or consulting fees, paid by the company to its sponsor, officers, or directors prior to the completion of an initial business combination, while post-combination compensation will be determined by the combined company's board, potentially influencing management's motivation in identifying a target Monthly Compensation | Recipient | Monthly Fee ($) | Start Date | | :---------------- | :-------------- | :---------- | | Theron E. Odlaug | $3,000 | Dec 3, 2021 | | Steven Norman | $3,000 | Dec 3, 2021 | | TLGY Sponsors LLC | $15,000 | Nov 30, 2021 | - Officers and directors are reimbursed for out-of-pocket expenses incurred in identifying potential target businesses and performing due diligence[244] - No other compensation (finder's or consulting fees) will be paid to the sponsor, officers, or directors prior to the completion of the initial business combination[244] - Post-business combination, compensation for directors and management will be determined by the combined company's board, which may influence management's motivation in selecting a target[245][246] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters As of February 21, 2023, there were 28,750,000 ordinary shares outstanding, comprising 23,000,000 Class A and 5,750,000 Class B shares, with TLGY Sponsors LLC and Jin-Goon Kim beneficially owning 18.6% of outstanding shares, and other significant beneficial owners including Highbridge Capital Management, LLC (7.03%), Saba Capital Management, L.P. (6.9%), and Castle Creek Arbitrage, LLC (6.2%) - As of February 21, 2023, there were a total of 28,750,000 ordinary shares outstanding, comprising 23,000,000 Class A ordinary shares and 5,750,000 Class B ordinary shares[8][247] Beneficial Ownership of Ordinary Shares (as of Feb 21, 2023) | Name and Address of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Issued and Outstanding Shares | | :----------------------------------- | :---------------------------------- | :------------------------------------------ | | TLGY Sponsors LLC | 5,344,700 | 18.6 % | | Jin-Goon Kim | 5,344,700 | 18.6 % | | Shrijay (Jay) Vijayan | 30,000 | * | | Donghyun Han | 30,000 | * | | Hyunchan Cho | 30,000 | * | | All officers and directors as a group (6 individuals) | 5,434,700 | 18.9 % | | Highbridge Capital Management, LLC | 2,019,895 | 7.03 % | | Saba Capital Management, L.P. | 1,987,710 | 6.9 % | | Boaz R. Weinstein | 1,987,710 | 6.9 % | | Saba Capital Management GP, LLC | 1,987,710 | 6.9 % | | Castle Creek Arbitrage, LLC | 1,786,898 | 6.2 % | | Mr. Allan Weine | 1,786,898 | 6.2 % |