AlphaTime Acquisition p(ATMC) - 2024 Q1 - Quarterly Report

Part I. Financial Information Item 1. Condensed Financial Statements AlphaTime Acquisition Corp, a SPAC, reported Q1 2024 net income of $442,265, with assets of $51.8 million, and faces substantial doubt about its ability to continue as a going concern Condensed Balance Sheets Total assets decreased to $51.8 million by March 31, 2024, from $74.1 million due to Trust Account reductions, widening the shareholders' deficit to $4.4 million Condensed Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash | $9,429 | $15,054 | | Investment held in Trust Account | $51,712,221 | $74,062,199 | | Total Assets | $51,827,960 | $74,120,305 | | Total Current Liabilities | $2,106,443 | $1,538,907 | | Total Liabilities | $4,521,443 | $3,953,907 | | Ordinary shares subject to possible redemption | $51,712,221 | $74,062,199 | | Total Shareholders' Deficit | ($4,405,704) | ($3,895,801) | Condensed Statements of Operations Net income for Q1 2024 was $442,265, a decrease from the prior year, primarily driven by Trust Account interest offset by rising operating costs Condensed Statements of Operations (Unaudited) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Formation and operating costs | $344,903 | $207,499 | | Income earned on Trust Account | $787,168 | $732,242 | | Net income | $442,265 | $524,743 | Condensed Statements of Cash Flows Net cash used in operations was $25,625 in Q1 2024, with $23.1 million withdrawn from the Trust Account for redemptions, reducing cash to $9,429 - The company withdrew $23.3 million from its Trust Account to fund the redemption of ordinary shares during the quarter[16] - The company received $185,000 in proceeds from a promissory note issued to a related party to fund operations and extensions[16] Notes to Unaudited Condensed Financial Statements Notes detail the SPAC's IPO, merger agreement with HCYC, related-party loans, and management's substantial doubt about its going concern ability - The company is a SPAC formed to effect a business combination and has not commenced any operations. All activities relate to organizational tasks, the IPO, and searching for a merger target[17][18] - On January 5, 2024, the Company entered into an Agreement and Plan of Merger with HCYC Group Company Limited[37] - The company has repeatedly extended its deadline to consummate a business combination, with the potential to extend up to January 4, 2025, by making monthly deposits of $55,000 into the Trust Account[29][30] - In December 2023, 2,160,774 ordinary shares were redeemed, resulting in approximately $23.3 million being removed from the Trust Account, leaving a balance of about $51.7 million[36] - Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern due to its working capital deficit and need for additional capital[38] - Subsequent to the quarter end, the company made deposits of $55,000 each on April 4 and May 4, 2024, to further extend the business combination deadline[87] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the blank check company's Q1 2024 net income, severe liquidity issues including a $1.99 million working capital deficit, and substantial doubt about its going concern ability - The company is a blank check company targeting businesses in fintech, alternative energy, biotech, logistics, AI, and cloud industries, with a focus on Asia[91] - As of March 31, 2024, the company had a cash balance of only $9,429 and a working capital deficit of $1,990,704, indicating severe liquidity constraints[97] - The company is reliant on loans from its Sponsor to fund working capital deficiencies and finance transaction costs. As of March 31, 2024, $875,000 was outstanding under a promissory note[97][99] - Management confirms substantial doubt about the Company's ability to continue as a going concern due to its financial state, despite the pending merger with HCYC[103] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, no material market risk disclosures are required, with no significant interest rate risk due to short-term Trust Account investments - As a smaller reporting company, the company is exempt from providing this information[126] - The company believes there is no material exposure to interest rate risk as funds in the Trust Account are invested in short-term U.S. government securities or money market funds[104] Item 4. Controls and Procedures Disclosure controls and procedures were ineffective as of March 31, 2024, due to a material weakness from lacking a qualified SEC reporting professional - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024[128] - The ineffectiveness is due to a material weakness in internal control over financial reporting related to the lack of a qualified SEC reporting professional[128] Part II. Other Information Item 1. Legal Proceedings No material legal proceedings are currently pending against the company or its management team - To the knowledge of management, there is no material litigation, arbitration, or other proceeding currently pending against the company[132] Item 1A. 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 Form 10-K filed on April 15, 2024 have occurred[133] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details unregistered sales of equity securities to the Sponsor, including 409,200 private placement units at $10.00 each, generating $4.092 million in gross proceeds - The Sponsor purchased a total of 409,200 Private Placement Units at $10.00 per unit, generating gross proceeds of $4,092,000[134][135] - The net proceeds from the IPO and private placement, totaling $70,242,000, were placed in the Trust Account[136] Item 5. Other Information No other information was reported for this item during the quarter - None[136] Item 6. Exhibits This section indexes exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL documents for financial data - The report includes certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL data files (Exhibits 101 and 104)[138]