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| Name | Symbol | Market | Type |
|---|---|---|---|
| Investcorp Europe Acquisition Corporation I | NASDAQ:IVCBW | NASDAQ | Equity Warrant |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0212 | 0.004 | 0.40 | 0 | 00:00:00 |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
Elgin Avenue Grand Cayman, |
||
(Address of principal executive offices) |
(Zip Code) | |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-half of one redeemable warrant |
||||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ||||
| Emerging growth company | ||||||
INVESTCORP EUROPE ACQUISITION CORP I
INDEX TO FINANCIAL STATEMENTS
As of March 31, 2024 (Unaudited) |
As of December 31, 2023 (As revised) |
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| Assets |
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| Current Assets |
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| Cash |
$ | $ | ||||||
| Prepaid expenses |
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| Interest receivable |
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| |
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| Total Current Assets |
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| Cash held in Trust Account |
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| |
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| Total Assets |
$ | $ | ||||||
| |
|
|
|
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| Liabilities, Shares Subject to Redemption and Shareholders’ Deficit |
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| Current Liabilities |
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| Accounts payable and accrued expenses |
$ | $ | ||||||
| Note Payable to Sponsor |
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| |
|
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|
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| Total Current Liabilities |
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| Warrant liabilities |
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| Deferred underwriting fee payable |
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| |
|
|
|
|||||
| Total Liabilities |
$ | $ | ||||||
| |
|
|
|
|||||
| Commitments and Contingencies |
||||||||
| Class A ordinary shares subject to possible redemption, $ |
||||||||
| Shareholders’ Deficit |
||||||||
| Preference shares, $ |
||||||||
| Class A ordinary shares, $ respectively) |
||||||||
| Class B ordinary shares, $ |
||||||||
| Accumulated deficit |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total Shareholders’ Deficit |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total Liabilities, Shares Subject to Redemption and Shareholders’ Deficit |
$ | $ | ||||||
| |
|
|
|
|||||
For the three months ended March 31, 2024 |
For the three months ended March 31, 2023 |
|||||||
Formation and operating costs |
||||||||
Loss from Operations |
( |
) | ( |
) | ||||
Other income (expense) |
||||||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Interest earned on Cash and Investments held in Trust Account |
||||||||
Total other income |
||||||||
Net Income (Loss) |
$ | $ | ( |
) | ||||
Basic and diluted weighted average redeemable Class A ordinary shares outstanding |
||||||||
Basic and diluted net income (loss) per redeemable Class A ordinary share |
$ | $ | ( |
) | ||||
Basic and diluted weighted average non-redeemable ordinary shares outstanding |
||||||||
Basic and diluted net income (loss) per non-redeemable ordinary share |
$ | $ | ( |
) | ||||
Ordinary Shares |
Additional paid-in capital |
Accumulated deficit |
Total Shareholders’ Deficit |
|||||||||||||||||||||||||
Class A |
Class B |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
| Balance - December 31, 2023 (As revised) |
$ | $ | — |
— | $ | ( |
) | $ | ( |
) | ||||||||||||||||||
| Extension Contribution |
( |
) | ( |
) | ||||||||||||||||||||||||
| Remeasurement of redeemable shares to redemption value |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
| Net income |
— | — | — | — | — | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance - March 31, 2024 |
$ |
$ |
— |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ordinary Shares |
Additional paid-in capital |
Accumulated deficit |
Total Shareholders’ Deficit |
|||||||||||||||||||||||||
Class A |
Class B |
|||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance - December 31, 2022 |
— | — | $ | — | $ | ( |
) | $ | ( |
) | ||||||||||||||||||
Extension Contribution |
( |
) | ( |
) | ||||||||||||||||||||||||
Remeasurement of redeemable shares to redemption value |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Balance - March 31, 2023 |
— |
— |
$ |
— |
$ |
( |
) |
$ |
( |
) | ||||||||||||||||||
For the three months ended |
||||||||
March 31, 2024 |
March 31, 2023 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net income (loss) |
$ | $ | ( |
) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
Interest earned on Cash and Investments held in Trust Account |
( |
) | ( |
) | ||||
Change in fair value of warrant liabilities |
( |
) | ||||||
Changes in operating assets and liabilities: |
||||||||
Prepaid expenses |
( |
) | ||||||
Accounts payable and accrued expenses |
||||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash Flows from Investing Activities: |
||||||||
Extension Contribution |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash Flows from Financing Activities: |
||||||||
Proceeds from affiliate promissory note |
||||||||
Net cash provided by financing activities |
$ | $ | ||||||
Net change in cash |
( |
) | ( |
) | ||||
Cash at beginning of period |
||||||||
Cash at end of period |
$ | $ | ||||||
Supplemental disclosure of cash flow information: |
||||||||
Remeasurement of ordinary shares to redemption value |
$ | $ | ||||||
As Previously Reported |
Adjustments |
As Revised |
||||||||||
| Balance Sheet as of December 31, 2023 |
||||||||||||
| Liabilities, Shares Subject to Redemption and Shareholders’ Deficit |
||||||||||||
| Current Liabilities |
||||||||||||
| Accounts payable and accrued expenses |
$ | $ | $ | |||||||||
| Total Current Liabilities |
||||||||||||
| |
|
|
|
|
|
|||||||
| Total Liabilities |
||||||||||||
| |
|
|
|
|
|
|||||||
| Shareholders’ Deficit |
||||||||||||
| Accumulated deficit |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Total Shareholders’ Deficit |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Statements of Operations for the year ended December 31, 2023 |
||||||||||||
| Formation and operating costs |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Loss from Operations |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Net Loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| |
|
|
|
|
|
|||||||
| Basic and diluted net loss per redeemable Class A ordinary share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Basic and diluted net loss per non-redeemable ordinary share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Statement of Changes in Shareholders’ Deficit for the year ended as of December 31, 2023 |
||||||||||||
| Accumulated Deficit |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| |
|
|
|
|
|
|||||||
| Total Shareholders’ Deficit |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| |
|
|
|
|
|
|||||||
| Statement of Cash Flows for the year ended as of December 31, 2023 |
||||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Changes in operating assets and liabilities: |
||||||||||||
| Accounts payable and accrued expenses |
||||||||||||
For the three months ended |
For the three months ended |
|||||||||||||||
March 31, 2024 |
March 31, 2023 |
|||||||||||||||
Redeemable Class A Ordinary Shares |
Non-Redeemable Ordinary Shares |
Redeemable Class A Ordinary Shares |
Non-Redeemable Ordinary Shares |
|||||||||||||
Basic and diluted net income (loss) per share: |
||||||||||||||||
Numerator: |
||||||||||||||||
Allocation of net income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Denominator: |
||||||||||||||||
Weighted-average shares outstanding |
||||||||||||||||
Basic and diluted net income (loss) per share |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
March 31, 2024 |
December 31, 2023 |
|||||||
As of beginning of the period, January 1 |
$ | $ | ||||||
Less: |
||||||||
Redemptions as a result of Special Shareholder Meetings |
( |
) | ||||||
Plus: |
||||||||
Extension Contribution |
||||||||
Remeasurement of carrying value to redemption value |
||||||||
Class A ordinary shares subject to possible redemption |
$ | $ | ||||||
| (1) | Class A ordinary shares : Each Class A ordinary share issued and outstanding immediately prior to the Second Merger Effective Time (after giving effect to redemptions) shall be exchanged for one Pubco Ordinary Share. |
| (2) | Warrants : Each warrant outstanding immediately prior to the Second Merger Effective Time shall cease to represent a right to acquire the number of Class A ordinary shares set forth in such warrant and will be exchanged for a warrant to acquire one Pubco Ordinary Share. Each of the Pubco Warrants shall have, and be subject to, substantially the same terms and conditions set forth in the Company Public Warrants. |
| (1) | if at any time from the Second Merger Effective Time through the date that is the tenth anniversary of the Second Merger Effective Time the volume-weighted average price of Pubco Ordinary Shares is greater than or equal to $ |
| (2) | if at any time from the Second Merger Effective Time through the date that is the tenth anniversary of the Second Merger Effective Time there is a change of control of Pubco. |
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon not less than |
| • | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon a minimum of |
| • | if, and only if, the Reference Value (as defined above under “—Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00”) equals or exceeds $ sub-divisions, share dividends, reorganizations, recapitalizations and the like); and |
| • | if the Reference Value is less than $18.00 per share (as adjusted for share sub-divisions, share dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
As of March 31, 2024 |
(Level 1) |
(Level 2) |
(Level 3) |
|||||||||
Assets |
||||||||||||
Cash held in Trust Account |
$ | $ | $ | |||||||||
Liabilities |
||||||||||||
| $ | $ | $ | ||||||||||
Private Placement Warrants |
$ | $ | $ | |||||||||
Total |
$ | $ | $ | |||||||||
As of December 31, 2023 |
(Level 1) |
(Level 2) |
(Level 3) |
|||||||||
Assets |
||||||||||||
Cash held in Trust Account |
$ | $ | $ | |||||||||
Liabilities |
||||||||||||
| $ | $ | $ | ||||||||||
Private Placement Warrants |
$ | $ | $ | |||||||||
Total |
$ | $ | $ | |||||||||
Fair Value as of March 31, 2024 |
Fair Value as of December 31, 2023 |
|||||||
Cash held in Trust Account |
$ | $ | ||||||
Private Warrant Liability |
||||
Fair Value as of December 31, 2023 |
$ | |||
in fair value |
( |
) | ||
Fair Value as of March 31, 2024 |
$ | |||
Input |
3/31/2024 |
12/31/2023 |
||||||
Share price |
$ | $ | ||||||
Exercise price |
$ | $ | ||||||
Risk-free rate of interest |
% | % | ||||||
Volatility |
% | % | ||||||
Term (in years) |
||||||||
Dividend yield |
% | % | ||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
All statements other than statements of historical fact included in this report including, without limitation, statements under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company incorporated on March 22, 2021 as a Cayman Islands exempted company and incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or assets. We have signed a Business Combination Agreement with our selected Business Combination target as of April 25, 2023. We intend to effectuate our initial business combination using cash from the proceeds of our IPO and the private placement of the Private Placement Warrants, the proceeds of the sale of our shares in connection with our initial business combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
The issuance of additional shares in connection with a business combination to the owners of the target or other investors:
| • | may significantly dilute the equity interest of investors in our IPO, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares; |
| • | may subordinate the rights of holders of Class A ordinary shares if preference shares are issued with rights senior to those afforded our Class A ordinary shares; |
| • | could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
| • | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
| • | may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants. Similarly, if we issue debt securities or otherwise incur significant debt to bank or other lenders or the owners of a target, it could result in: |
| • | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
| • | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
| • | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
| • | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
| • | our inability to pay dividends on our Class A ordinary shares; |
| • | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
| • | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
27
| • | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
| • | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and activities related to searching for a target for our Business Combination. We will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents.
For the three months ended March 31, 2024, we had a net income of $4,556,525, which consisted of a $6,593,750 gain on the change in fair value of warrant liabilities and $1,403,597 in interest income on cash held in trust offset by $3,440,822 in formation and operating costs.
For the three months ended March 31, 2023, we had a net loss of $2,116,311, which was comprised of $3,710,314 in formation and operating costs and a $2,014,815 loss on change in warrant liability, offset by $3,608,818 in interest earned on Investments held in Trust Account.
Liquidity and Capital Resources
Our liquidity needs have been satisfied through receipt of $25,000 from the sale of the Founder Shares to our Sponsor to cover for certain expenses on our behalf in exchange for the issuance of the 8,625,000 Founder Shares, and the loans entered into in the principal amount of up to $2,000,000 (the “March 2023 Loan”), in the principal amount of $1,700,000 (the “July 2023 Loan”), in the principal amount of up to $500,000 (the “November 2023 Loan”), in the principal amount of up to $1,250,000 (the “Second November 2023 Loan”), and in the principal amount of $750,000 (the “April 2024 Loan,” and collectively, the “Loans”) with an affiliate of the Sponsor to provide the Company with additional working capital and to fund Extension Contributions into the Trust Account until the earlier of a completion of a business combination or the extended date of June 17, 2024.
For the three months ended March 31, 2024, we utilized $304,754 in operating activities, which was largely driven by an $4,556,525 in net income and a $3,149,896 increase in accounts payable and accrued expense, offset by $1,403,597 in interest earned on cash held in Trust Account, a $6,593,750 gain on the change in value of our warrant liabilities and $13,828 in prepaid expenses.
For the three months ended March 31, 2024, we utilized $450,000 in our investing activities, which was driven entirely by Extension Contributions.
For the three months ended March 31, 2024, we were provided $700,000 in our financing activities, which was entirely the result of proceeds from our Promissory Note.
For the three months ended March 31, 2023, we utilized $316,285 in operating activities, which was largely driven by a $2,116,311 net loss and $3,608,818 in interest earned on cash and investments held in Trust Account, offset by a $3,235,269 increase in accounts payable and accrued expense, a $2,014,815 loss on the change in value of our warrant liabilities and $158,760 in prepaid expenses.
For the three months ended March 31, 2023, we utilized $350,000 in our investing activities, which was driven entirely by Extension Contributions.
For the three months ended March 31, 2023, we were provided $350,000 in our financing activities, which was entirely the result of proceeds from our Promissory Note.
The net proceeds from the sale of the Units in our IPO and the sale of the Private Placement Warrants for an aggregate purchase price of $16,700,000, after deducting offering expenses of $1,103,227 and underwriting commissions of $6,900,000 (excluding deferred underwriting commissions of $12,075,000), was $351,900,000, which is held in the Trust Account and includes the deferred underwriting commissions described above. The proceeds held in the Trust Account are invested in an interest-bearing account until the earlier of the consummation of our initial business combination or liquidation. Our shareholders have exercised their right of redemption in the amount of $243,649,972, which left $129,619,541 in proceeds and interest earned in the Trust Account as of March 31, 2024. As of May 22, 2024, a total of $106,227,129 was held in the Trust Account. This value reflects the approximately $24.4 million that was withdrawn for the redemptions that have occurred in the Third Extraordinary General Meeting.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (excluding deferred underwriting commissions) net of any redemptions, to complete our initial business combination. We may withdraw interest to pay our taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
Prior to the completion of our initial business combination, as of March 31, 2024, we have available to us approximately $43,922 of proceeds held outside the Trust Account, as well as any funds from loans from our Sponsor, its affiliates or members of our management team. We will use these funds to primarily identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses and structure, negotiate and complete a business combination.
28
If our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $2,000,000 of such loans may be convertible into Private Placement Warrants of the post business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants . Prior to the completion of our initial business combination, we do not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.
On March 7, 2023, we entered into a non-interest bearing convertible unsecured loan (the “March 2023 Loan”) in the principal amount of up to $2,000,000 from one of our Sponsor’s affiliates to provide us with additional working capital and to fund the Extension Contributions payments. The portion of the March 2023 Loan used to provide us with additional working capital was not deposited into our Trust Account. If we do not consummate an initial business combination by the Extended Date, the March 2023 Loan will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The March 2023 Loan is convertible into Private Placement Warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants . The conversion option represents an embedded derivative under ASC 815-15, “Embedded Derivatives.” The Company has determined that based on the valuation of its Private Placement Warrants and the fact that a Business Combination is not considered probable until such time as it is consummated, the value of this conversion option is de minimis.
In addition, on July 6, 2023, November 15, 2023, November 27, 2023 and April 15, 2024, the Company entered into non-interest bearing unsecured loans in the principal amount of up to $1,700,000 (the “July 2023 Loan”), in the principal amount of up to $500,000 (the “November 2023 Loan”), in the principal amount of up to $1,250,000 (the “Second November 2023 Loan”) and in the principal amount of up to $750,000 (the “April 2024 Loan,” together with the March 2023 Loan, the July 2023 Loan, the November 2023 Loan and the Second November 2023 Loan, the “Loans”) with an affiliate of the Sponsor to fund Extension Contribution payments into the Trust Account until the earlier of a completion of the Business Combination or the Extended Date. The portion of the Loans used to provide the Company with additional working capital were not deposited into the Trust Account.
The total amount outstanding under the loans entered into on March 7, 2023, July 6, 2023, November 15, 2023, November 27, 2023 and April 15, 2024, and any other Working Capital Loans (as defined below) as of March 31, 2024 and December 31, 2023 was $5,450,000 and $4,750,000, respectively.
On March 14, 2023, we convened the First Extraordinary General Meeting virtually, at which our Sponsor agreed, by making monthly advancements on the March 2023 Loan, to contribute the Extension Contribution of the lesser of (x) an aggregate of $350,000 or (y) $0.03 per share for each public share that was not redeemed at the First Extraordinary General Meeting for each monthly period (commencing on March 17, 2023 and ending on the 17th day of each subsequent month), or prior thereof, until the earlier of the completion of the initial business combination and the end of the Extension Period.
On December 5, 2023, we convened the Second Extraordinary General Meeting virtually, at which our Sponsor agreed, by making monthly advancements on the Loans, to contribute Extension Contributions into the Trust Account the lesser of (x) an aggregate of $150,000 or (y) $0.02 per share for each Public Share that was not redeemed at the Second Extraordinary General Meeting for each monthly period (commencing on December 17, 2023 and ending on the 17th day of each subsequent month), or portion thereof, until the earlier of the completion of the initial business combination and the Extended Date. For the avoidance of doubt, the maximum aggregate Extension Contributions to the Trust Account shall not exceed $900,000 based on up to six monthly Extension Contributions through the Extended Date.
On May 21, 2024, the Company held an extraordinary general meeting (the “Third Extraordinary General Meeting”) to vote on a proposal to approve an Amendment to Company’s Articles extending the date by which the Company must complete its initial business combination from June 17, 2024 to December 17, 2024 (the “Third Extension Amendment Proposal”), and the stockholders approved the Third Extension Amendment Proposal at that meeting. In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 2,159,610 Class A ordinary shares properly exercised their rights to redeem their shares for cash at a redemption price of $11.32 per share. In connection with this redemptions, approximately $24.4 million was withdrawn from the Trust Account to fund such redemptions.
We expect our future primary liquidity requirements during the period until the business combination to include legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; legal and accounting fees related to regulatory reporting requirements; Nasdaq and other regulatory fees; consulting, travel and miscellaneous expenses incurred during the search for initial business combination target; and general working capital that will be used for miscellaneous expenses and reserves.
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In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
If we are not able to consummate a business combination before the end of the business combination period, we will commence an automatic winding up, dissolution and liquidation. Management has determined that the automatic liquidation, should a business combination not occur, and potential subsequent dissolution also raises substantial doubt about our ability to continue as a going concern. While management intends to complete a business combination, it is uncertain whether we will be able to do so. No adjustments have been made to the carrying amounts of assets or liabilities.
These conditions, including the working capital deficit and proximity to the end of our Extension Period, raise substantial doubt about our ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. There is no assurance that our plan to consummate a business combination will be successful within the business combination period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Controls and Procedures
We are required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.
We will assess the internal controls of our target business or businesses prior to the completion of our initial business combination and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an effective system of internal controls. A target business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls. Many small and mid-sized target businesses we may consider for our initial business combination may have internal controls that need improvement in areas such as:
| • | staffing for financial, accounting and external reporting areas, including segregation of duties; |
| • | reconciliation of accounts; |
| • | proper recording of expenses and liabilities in the period to which they relate; |
| • | evidence of internal review and approval of accounting transactions; |
| • | documentation of processes, assumptions and conclusions underlying significant estimates; and |
| • | documentation of accounting policies and procedures. |
Because it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary for us to meet regulatory requirements and market expectations for our operation of a target business, we may incur significant expenses in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing reporting.
Off-Balance Sheet Arrangements
As of March 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
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Commitments and Contractual Obligations
Registration Rights
The holders of the Founder Shares and Private Placement Warrants (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights and shareholder agreement to be signed prior to or on the Effective Date of the IPO, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter will be entitled to a deferred fee of $0.35 per Unit, or $12,075,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Consulting Agreements
In April 2023, the Company entered into two agreements with each of the IPO underwriters, each to act as a capital markets advisor and as a placement agent in relation to the Business Combination. On June 9, 2023, the Company terminated the two engagement letters with one of the IPO underwriters, and such termination nullified the Company’s obligation to pay any fees under such agreements. With respect to the other IPO underwriter, as compensation for their services, half of a placement fee of 3.0% of the gross proceeds of securities sold in the placement will be paid to the agent upon consummation of the placement (the “Placement Fee”) and $4,000,000 will be paid to the agent upon consummation of the Business Combination (the “Transaction Fee”). The Placement Fee and the Transaction Fee will only become payable in the event the placement and the Business Combination are consummated, respectively, and as such nothing will be recorded until that time.
In June 2023, the Company entered into an agreement with a third-party consultant to provide advisory services in relation to the Business Combination. As compensation for those services, an advisory fee of $2,000,000 is payable in the event the transaction is consummated (the “Advisory Fee”). This fee will only become payable in the event the Business Combination is consummated and as such nothing will be recorded until that time.
Additionally, the agent and the consultant are eligible to be reimbursed in the aggregate up to $500,000 in expenses in the event the Business Combination is not consummated and $1,000,000 in the event it is consummated. As of March 31, 2024, approximately $1,185,000 has been incurred by the third parties. As the Business Combination is not yet considered probable, $500,000 of the approximately $1,185,000 is accrued in the Accounts Payable and Accrued Expenses line on the balance sheet.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an independent registered public accounting firm’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.
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Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and income and expenses during the periods reported. Actual results could materially differ from those estimates. As of the end of the reporting period, we consider our critical accounting estimates to be the fair value of our warrants and convertible promissory note.
Critical Accounting Policies
Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our financial statements. We describe our significant accounting policies in Note 3 – Summary of Significant Accounting Policies, of the Notes to Financial Statements included in this Report. Our financial statements have been prepared in accordance with U.S. GAAP. Certain of our accounting policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates. On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry trends and information available from outside sources, as appropriate. However, by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.
Recent Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The update simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options for convertible instruments and introducing other changes. As a result of ASU 2020-06, more convertible debt instruments will be accounted for as a single liability measured at amortized cost and more convertible preference shares will be accounted for as a single equity instrument measured at historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted ASU 2020-06 upon inception. The impact to the balance sheet, statements of operations and cash flows was not material.
In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 31, 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its financial position, results of operations or financial statement disclosure.
We have considered all new accounting pronouncements and have concluded that there are no new pronouncements that may have a material impact on our results of operations, financial condition, or cash flows, based on the current information.
Factors That May Adversely Affect Our Results of Operations
Our results of operations and our ability to complete an initial business combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending and geopolitical instability, such as the military conflicts in the Ukraine and Gaza. We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial business combination.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of March 31, 2024, we were not subject to any material market or interest rate risk. Following the consummation of our IPO, the net proceeds of the IPO and the Private Placement, including amounts in the Trust Account, were invested in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act.
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Prior to December 14, 2023, funds in the Trust Account were held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of the Company being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), prior to the 24-month anniversary of the Effective Date of the registration statement relating to the Company’s IPO, the Company instructed Continental to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest bearing account until the earlier of consummation of its initial Business Combination or liquidation. In connection with such instructions, on December 14, 2023, the Company and Continental entered into an amendment to the Trust Agreement, which governs the investment of monies held in the Trust Account, to specifically allow the investment of those funds into an interest-bearing account.
Due to the short-term nature of these investments, we believe there was no associated material exposure to interest rate risk.
We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial and accounting officer (our “Certifying Officers”) evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024, pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2024, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting in connection with lack of controls to assure the accuracy and completeness of accrued expenses and interest earned in the Trust Account.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, we concluded that our controls over recognition of accrued expenses was not effectively designed or maintained. Our management performed additional analysis as deemed necessary to ensure that our financial statements included in this Quarterly Report on Form 10-Q were prepared in accordance with generally accepted accounting practices in the United States. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows of the periods presented.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management team, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In light of the material weakness described above, our management team has performed additional accounting and financial analyses and other post-closing procedures. We have enhanced, and will continue to enhance, our internal controls and procedures. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we plan to continue to improve these processes to ensure that the nuances of such transactions are effectively evaluated.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
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Management’s Report on Internal Controls Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework (2013), our management concluded that our internal control over financial reporting was not effective as of March 31, 2024.
In light of the material weakness described above, our management team has performed additional accounting and financial analyses and other post-closing procedures. We have enhanced, and will continue to enhance, internal controls and procedures. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we plan to continue to improve these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this report include the risks described under the heading “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 11, 2024 (the “2023 10-K”). Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this report, there have been no material changes to the risk factors disclosed in the 2023 10-K. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
No underwriting discounts or commissions were paid with respect to such sales.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
| * | Filed herewith |
| ** | Furnished herewith |
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| INVESTCORP EUROPE ACQUISITION CORP I | ||||||
| Date: May 28, 2024 | By: | /s/ Craig Sinfield-Hain | ||||
| Name: Craig Sinfield-Hain | ||||||
| Title: Chief Financial Officer | ||||||
36
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Baroness Ruby McGregor-Smith, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Investcorp Europe Acquisition Corp I. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 28, 2024 | By: | /s/ Ruby McGregor-Smith | ||||
| Baroness Ruby McGregor-Smith | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OR 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Craig Sinfield-Hain, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Investcorp Europe Acquisition Corp I. |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: May 28, 2024 | By: | /s/ Craig Sinfield-Hain | ||||
| Craig Sinfield-Hain | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer) |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Investcorp Europe Acquisition Corp I (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Baroness Ruby McGregor-Smith, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as added by § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: May 28, 2024 | By: | /s/ Ruby McGregor-Smith | ||||
| Baroness Ruby McGregor-Smith | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) |
| * | The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document. |
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Investcorp Europe Acquisition Corp I (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Craig Sinfield-Hain, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as added by § 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. |
| Date: May 28, 2024 | By: | /s/ Craig Sinfield-Hain | ||||
| Craig Sinfield-Hain | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial Officer) |
| * | The foregoing certification is being furnished solely pursuant to 18 U.S.C. §1350 and is not being filed as part of the Report or as a separate disclosure document. |
Condensed Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
| Preferred Stock, Shares Issued | 0 | 0 |
| Preferred Stock, Shares Outstanding | 0 | 0 |
| Common Class A [Member] | ||
| Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Temporary Equity, Shares Outstanding | 11,545,295 | 11,545,295 |
| Temporary Equity, Redemption Price Per Share | $ 11.23 | $ 11.07 |
| Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
| Common Stock, Shares, Issued | 8,624,999 | 8,624,999 |
| Common Stock, Shares, Outstanding | 8,624,999 | 8,624,999 |
| Common Class B [Member] | ||
| Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
| Common Stock, Shares, Issued | 1 | 1 |
| Common Stock, Shares, Outstanding | 1 | 1 |
Organization and Business Operation |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Business Operation | Note 1—Organization and Business Operation Investcorp Asia Acquisition Corp I was incorporated in the Cayman Islands on March 22, 2021. On October 7, 2021, the Company changed its name to Investcorp Europe Acquisition Corp I (the “Company”). The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or assets (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of March 31, 2024, the Company had not commenced any operations. All activity for the period from March 22, 2021 (inception) through March 31, 2024 relates to the Company’s formation and Initial Public Offering of units (the “IPO”) described below, and since the IPO, the search for a target business. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The registration statement for the Company’s IPO was declared effective on December 14, 2021 (the “Effective Date”). On December 17, 2021, the Company consummated its IPO of 34,500,000 units, which included the full exercise of the underwriters’ over-allotment option of 4,500,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $345,000,000, which is discussed further in Note 4. Simultaneously with the closing of the IPO, the Company consummated the sale of 16,700,000 warrants (the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant in a private placement to Europe Acquisition Holdings Limited (the “Sponsor”), generating proceeds of $16,700,000. Following the closing of the IPO on December 17, 2021, $351,900,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a Trust Account (“Trust Account”), located in the United States at a nationally recognized financial institution, with Continental Stock Transfer & Trust Company (“Continental”) acting as trustee. Prior to December 14, 2023, funds in the Trust Account were held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 (the “Investment Company Act”). However, to mitigate the risk of the Company being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), prior to the 24-month anniversary of the Effective Date of the registration statement relating to the Company’s IPO, the Company instructed Continental to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest bearing account until the earlier of consummation of its initial Business Combination or liquidation. In connection with such instructions, on December 14, 2023, the Company and Continental entered into an amendment to the Investment Management Trust Agreement dated December 11, 2021 (the “Trust Agreement”), which governs the investment of monies held in the Trust Account, to specifically allow the investment of those funds into an interest-bearing account. Pursuant to the Trust Agreement, the trustee is not permitted to invest in other securities or assets. The Trust Account is intended as a holding place for funds pending the earliest to occur of either: (i) the completion of the initial Business Combination; (ii) the redemption of any Public Shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (the “Articles”) to (A) modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination within the time frame to consummate the business combination period (the “Business Combination Period”) as defined in its Articles or during any extended time that the Company has to consummate a Business Combination as a result of a shareholder vote to amend its Articles (an “Extension Period”) or (B) with respect to any other provision relating to shareholders’ rights or pre-Business Combination activity; and (iii) absent an initial Business Combination within the Business Combination Period or Extension Period from the closing of the IPO, the return of the funds held in the Trust Account to the Company’s public shareholders as part of the redemption of the Public Shares. If the Company has not consummated the initial Business Combination within the required time period, the public shareholders may receive only approximately $10.20 per Public Share, or less in certain circumstances, on the liquidation of the Trust Account and the warrants will expire worthless. If the Company seeks shareholder approval to proceed with a Business Combination, a majority of the shares voted in favor of the Business Combination would be required. If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its Articles, conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 7) and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each public shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or don’t vote at all. Notwithstanding the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Articles provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Extension Period and (c) not to propose an amendment to the Articles (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to shareholders’ rights or pre-initial business combination activity, unless the Company provides the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Extension Period. However, if the Sponsor acquires Public Shares, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Extension Period. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 11) held in the Trust Account in the event the Company does not complete a Business Combination within the Extension Period; and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than $10.20 per Public Share In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.20 per Public Share or (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.20 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Extraordinary General Meetings On March 14, 2023, the Company convened an extraordinary general meeting (the “First Extraordinary General Meeting”) virtually, to vote on the proposals described below. A total of 34,372,929 of the Company’s Class A ordinary shares and Class B ordinary shares (the “Ordinary Shares”), or 79.1% of the Company’s outstanding shares as of February 22, 2023, the record date for the First Extraordinary General Meeting, were represented virtually or by proxy at the First Extraordinary General Meeting. As approved by its shareholders at the First Extraordinary Meeting, the Company filed an amendment (the “First Extension Amendment”), which (i) extended the date by which the Company must consummate its initial business combination from March 17, 2023 to December 17, 2023 and (ii) removed the limitation that the Company shall not redeem public shares to the extent that such redemption would cause the Company’s net tangible assets to be less than $5,000,001 (the “Redemption Limitation Amendment”). Additionally, at the First Extraordinary General Meeting, holders of Public Shares were afforded the opportunity to require the Company to redeem their Public Shares for their pro rata share of the Trust Account. In connection with the vote to approve the First Extension Amendment and the Redemption Limitation Amendment, the holders of 15,494,333 Class A ordinary shares properly exercised their rights to redeem their shares for cash at a redemption price of approximately $10.43 per share for an aggregate redemption amount of approximately $161.6 million, leaving 19,005,667 Public Shares remaining outstanding. Following this redemption, the balance in the Trust Account was approximately $198.2 million. In connection with the approval of the First Extension Amendment, the Sponsor has agreed, by making monthly advancements on the March 2023 Loan (as defined below), to contribute (each such contribution, an “Extension Contribution”) into the Trust Account the lesser of (x) an aggregate of $350,000 or (y) $0.03 per share for each public share that was not redeemed at the First Extraordinary General Meeting for each monthly period (commencing on March 17, 2023 and ending on the 17 th day of each subsequent month), or prior thereof, until the earlier of the completion of the initial business combination and December 17, 2023. On December 5, 2023, the Company held an extraordinary general meeting (the “Second Extraordinary General Meeting”), at which holders of Public Shares approved an amendment to the Articles to extend the date by which the Company must complete its initial business combination from December 17, 2023 to June 17, 2024 (the “Extended Date”). As a result of the approval of the extension to June 17, 2024, the Sponsor agreed, by making monthly advancements on the Loans (as defined below), to make Extension Contributions into the Trust Account in the amount of the lesser of (x) an aggregate of $150,000 or (y) $0.02 per share for each Class A ordinary share included as part of the Units sold in the Company’s IPO (including any shares issued in exchange thereof) that were not redeemed at the Second Extraordinary General Meeting for each monthly period (commencing on December 17, 2023 and ending on the 17th day of each subsequent month), or portion thereof, until the earlier of the completion of the initial business combination and June 17, 2024. For the avoidance of doubt, the maximum aggregate Extension Contributions to the Trust Account shall not exceed $900,000 based on up to six monthly Extension Contributions through June 17, 2024. Additionally, at the Second Extraordinary General Meeting holders of Public Shares were afforded the opportunity to require the Company to redeem their Public Shares for their pro rata share of the Trust Account. The holders of 7,460,372 Class A ordinary shares properly exercised their rights to redeem their shares for cash at a redemption price of approximately $11.00 per share for an aggregate redemption amount of approximately $82.0 million, leaving 11,545,295 Public Shares remaining outstanding. On May 21, 2024, the Company held an extraordinary general meeting (the “Third Extraordinary General Meeting”) to vote on a proposal to approve an Amendment to the Company’s Articles extending the date by which the Company must complete its initial business combination from June 17, 2024 to December 17, 2024 (the “Third Extension Amendment Proposal”), and the stockholders approved the Third Extension Amendment Proposal at that meeting . In connection with the vote to approve the Third Extension Amendment Proposal, the holders of 2,159,610 Class A ordinary shares properly exercised their rights to redeem their shares for cash at a redemption price of $ 11.32 per share. In connection with this redemption, approximately $ 24.4 million was withdrawn from the Trust Account to fund such redemptions. As of March 31, 2024, the Company had made nine Extension Contribution payments pursuant to the March 2023 Loan, the July 2023 Loan and the November 2023 Loan (as defined below), each in the amount of $350,000, as well as four Extension Contribution Payments pursuant to the Second November 2023 Loan, each in the amount of $150,000. Subsequent to March 31, 2024 but prior to the issuance of these financial statements, the Company has made two Extension Contribution payments pursuant to the April 2024 Loan in the amount of $150,000 each. For a more detailed description of the Loans, see “Liquidity, Capital Resources and Going Concern.” Liquidity, Capital Resources and Going Concern As of March 31, 2024, the Company had $43,922 in its operating bank accounts and a working capital deficit of $17,116,441. As of March 31, 2024, approximately $10,416,591 of the amount on deposit in cash held in the Trust Account represented interest income and $3,750,000 represented an Extension Contribution, all of which are available to pay the Company’s tax obligations, if any. The Company’s liquidity needs up to December 17, 2021 had been satisfied through a payment from the Sponsor of $25,000 (see Note 7) for the Founder Shares to cover certain offering costs and the loan under an unsecured promissory note from the Sponsor of up to $300,000 (see Note 7). In addition, in order to finance transaction costs in connection with the Business Combination, the Company’s Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, provide the Company Working Capital Loans, as defined below (see Note 7). As of March 31, 2024, there were no amounts outstanding under any Working Capital Loans. On March 7, 2023, the Company entered into a non-interest bearing convertible unsecured loan (the “March 2023 Loan”) in the principal amount of up to $2,000,000 from one of the Sponsor’s affiliates to provide the Company with additional working capital and to fund the Extension Contributions. The portion of the March 2023 Loan used to provide the Company with additional working capital was not deposited into the Trust Account. If the Company does not consummate an initial business combination by the Extension Period, the March 2023 Loan will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The March 2023 Loan is convertible into Private Placement Warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. The conversion option represents an embedded derivative under ASC 815-15, “Embedded Derivatives.” The Company has determined that based on the valuation of its Private Placement Warrants and the fact that a Business Combination is not considered probable until such time as it is consummated, the value of this conversion option is de minimis. In addition, on July 6, 2023, November 15, 2023, November 27, 2023 and April 15, 2024, the Company entered into non-interest bearing unsecured loans in the principal amount of up to $1,700,000 (the “July 2023 Loan”), in the principal amount of up to $500,000 (the “November 2023 Loan”), in the principal amount of up to $1,250,000 (the “Second November 2023 Loan”) and in the principal amount of up to $750,000 (the “April 2024 Loan” and, together with the March 2023 Loan, the July 2023 Loan, the November 2023 Loan and the Second November 2023 Loan, the “Loans”) with an affiliate of the Sponsor to provide the Company with additional working capital and to fund Extension Contributions into the Trust Account until the earlier of a completion of the Business Combination or December 17, 2024. The July 2023 Loan, the November 2023 Loan, the Second November 2023 Loan and the April 2024 Loan bear no interest and shall be due and payable on the earlier of (i) the date on which the Company consummates a business combination or (ii) the date of that the winding up of the Company is effective. If the Company does not consummate an initial business combination by the Extended Date, the July 2023 Loan, the November 2023 Loan, the Second November 2023 Loan and the April 2024 Loan will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. If at any time the board of directors of the Company determines that the Company will not be able to consummate an initial business combination by the Extended Date and that the Company shall instead liquidate, the Sponsor’s obligation to continue to make the Extension Contributions shall cease immediately upon such determination. On December 5, 2023, in connection with Second Extraordinary General Meeting, the Sponsor agreed, by making monthly advancements on the Loans, to make Extension Contributions into the Trust Account in the amount of the lesser of (x) an aggregate of $150,000 or (y) $0.02 per share for each Class A ordinary share included as part of the Units sold in the Company’s IPO (including any shares issued in exchange thereof) that were not redeemed at the Second Extraordinary General Meeting for each monthly period (commencing on December 17, 2023 and ending on the 17th day of each subsequent month), or portion thereof, until the earlier of the completion of the initial business combination and June 17, 2024. The total amount outstanding under the loans entered into on March 7, 2023, July 6, 2023, November 15, 2023, November 27, 2023, April 15, 2024 and any other Working Capital Loans as of March 31, 2024 and December 31, 2023 was $5,450,000 and $4,750,000, respectively. If the Company is not able to consummate a Business Combination before the end of the Extension Period, the Company will commence an automatic winding up, dissolution and liquidation. Management has determined that the automatic liquidation, should a Business Combination not occur, and potential subsequent dissolution also raises substantial doubt about the Company’s ability to continue as a going concern. While management intends to complete a Business Combination, it is uncertain whether the Company will be able to do so. No adjustments have been made to the carrying amounts of assets or liabilities. Under Accounting Standards Update (ASU)
2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), these conditions, including the working capital deficit as well as the remaining time in the Extension Period, raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that the financial statements are issued. There is no assurance that the Company’s plan to consummate a Business Combination will be successful within the Extension Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Revision to Prior Period Financial Statements |
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| Prior Period Adjustment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revision to Prior Period Financial Statements | Note 2—Revision to Prior Period Financial Statements In the first quarter of 2024, the Company was made aware of printing fees and electronic filing fees that were incurred, but not recorded, for the year ended December 31, 2023. This resulted in an understatement of expenses and accrued expenses for the year ended December 31, 2023. The Company evaluated the materiality of the error described above from a qualitative and quantitative perspective. Based on this evaluation, taking into account the guidance in SEC Staff Accounting Bulletin No. 99, “Materiality”, (“SAB 99”) and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” (“SAB 108”), the Company concluded that the correction would not be material to the financial position or results of operations for the year ended December 31, 2023 . The audited financial statements as of December 31, 2023 are revised as follows:
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Significant Accounting Policies |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Significant Accounting Policies | Note 3—Significant Accounting Policies Basis of Presentation The accompanying unaudited condens ed financial statements have b een prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 11, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2023, is derived from the audited financial statements presented in the Company’s Annual Report on Form 10- K for the year ended December 31, 2023, as filed with the SEC on April 11, 2024. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of these financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments, which include short-term bank deposits that are not restricted as to withdrawal or use, and short-term debentures, with original periods to maturity not exceeding three months, to be cash equivalents. The Company had cash of $43,922 and $98,676 as of March 31, 2024 and December 31, 2023, respectively. The Company had no cash equivalents as of March 31, 2024 and December 31, 2023. Cash Held in Trust Account Investments in money market funds are recognized at fair value and are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from marketable securities held in the Trust Account in the accompanying statement of operations. The estimated fair values of marketable securities held in the Trust Account are determined using available market information. As of March 31, 2024 and December 31, 2023, the assets held in the Trust Account consisted of cash and money market mutual funds in the amount of $129,619,541 and $127,703,238, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of March 31, 2024, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Offering Costs Associated with Initial Public Offering The Company complies with the requirements of the ASC 340-10-S99-1 one-half of one redeemable warrant (“Public Warrants”) and the Private Placement Warrants to the proceeds received from the Units sold upon the completion of the IPO. Accordingly, on December 17, 2021 offering costs totaling $20,078,227 (consisting of $6,900,000 of underwriting fee, $12,075,000 of deferred underwriting fee and $1,103,227 of other offering costs) were recognized with $854,057 included in accumulated deficit as an allocation for the Public Warrants and the Private Placement Warrants. Subsequent to the IPO, upon invoice receipt, other offering costs were adjusted downwards by $94,443 to true up estimates to the actual expenses incurred. Net Income (Loss) Per Ordinary Share The Company’s statements of operations include a presentation of net income (loss) per share for Ordinary Shares subject to possible redemption and applies the two-class method in calculating net income (loss) per share. Net income (loss) per ordinary share, basic and diluted, is calculated by dividing the pro- rata allocation of net income (loss) for each class, by the weighted average number of Class A and Class B non-redeemable ordinary shares outstanding for the period. Net income (loss) is allocated pro-rata between Class A redeemable and Class B non-redeemable shares based on their respective weighted average shares outstanding for the period. As of March 31, 2024, the potential Ordinary Shares for outstanding Public and Private Warrants to purchase the Company’s Ordinary Shares were excluded from diluted earnings per share for the three months ended March 31, 2024 because they are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the period. The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Fair Value Measurements The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The 33,950,000 warrants issued in connection with the IPO and the Private Placement (including the 17,250,000 Public Warrants included in the Units and the 16,700,000 Private Placement Warrants) were recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable Ordinary Shares (including Ordinary Shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Ordinary Shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of March 31, 2024 and December 31, 2023, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount. Increases or decreases in the carrying amount of redeemable Ordinary Shares are affected by charges against additional paid-in capital and accumulated deficit. As of March 31, 2024 and December 31, 2023, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
Income taxes The Company accounts for income taxes in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under the asset and liability method, as required by this accounting standard, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to the period when assets are realized or liabilities are settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. There were no unrecognized tax benefits as of March 31, 2024. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2024, there were no unrecognized tax benefits, and no amounts were accrued for the payment of interest and penalties. There is currently no taxation imposed by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The update simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options for convertible instruments and introducing other changes. As a result of ASU 2020-06, more convertible debt instruments will be accounted for as a single liability measured at amortized cost and more convertible preference shares will be accounted for as a single equity instrument measured at historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted ASU 2020-06 upon inception. The impact to the balance sheet, statements of operations and cash flows was not material. In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax, and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 31 , 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its financial position, results of operations or financial statement disclosure. Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
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Initial Public Offering |
3 Months Ended |
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Mar. 31, 2024 | |
| Stockholders' Equity Note [Abstract] | |
| Initial Public Offering | Note 4— Initial Public Offering On December 17, 2021 the Company sold 34,500,000 Units, which included 4,500,000 Units from the underwriters’ full exercise of their over-allotment option, at a price of $10.00 per Unit, generating gross proceeds to the Company of $345,000,000. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 10). Following the closing of the IPO on December 17, 2021 an aggregate of $351,900,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into the Trust Account. Prior to December 14, 2023, funds in the Trust Account were held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to mitigate the risk of the Company being deemed to have been operating as an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act), prior to the 24-month anniversary of the Effective Date of the registration statement relating to the Company’s IPO, the Company instructed Continental to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest bearing account until the earlier of consummation of its initial business combination or liquidation. In connection with such instructions, on December 14, 2023, the Company and Continental entered into an amendment to the Trust Agreement to specifically allow the investment of those funds into an interest bearing account. Transaction costs of the IPO amounted to $20,078,227 consisting of $6,900,000 of underwriting fee, $12,075,000 of deferred underwriting fee and $1,103,227 of other offering costs. Of the transaction costs, $19,224,170 was included in additional
paid-in capital and $854,057 was included in accumulated deficit. |
Signed Business Combination Agreement |
3 Months Ended | ||||||||||||
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Mar. 31, 2024 | |||||||||||||
| Business Combinations [Abstract] | |||||||||||||
| Signed Business Combination Agreement | Note 5— Signed Business Combination Agreement On April 25, 2023, the Company entered into a business combination agreement with OpSec Holdings, a Cayman Islands exempted company with limited liability (“Pubco”), Opal Merger Sub I, a Cayman Islands exempted company incorporated with limited liability and wholly-owned subsidiary of Pubco (“Merger Sub I”), Opal Merger Sub II, a Cayman Islands exempted company incorporated with limited liability and wholly-owned Subsidiary of Pubco (“Merger Sub II”), Orca Holdings Limited, a Cayman Islands exempted company incorporated with limited liability (“OpSec”), Orca Midco Limited, a private limited company incorporated under the Laws of England and Wales (“Orca Midco”), Orca Bidco Limited, a private limited company incorporated under the Laws of England and Wales and a subsidiary of OpSec (“Orca”), Investcorp Technology Secondary Fund 2018, L.P., a Cayman Islands exempted limited partnership (“ITSF”), and Mill Reef Capital Fund ScS, a limited partnership ( société en commandite simple Following consummation of the above-described transactions (the “Transactions”), the Company will be a wholly-owned subsidiary of Pubco and OpSec will be a wholly-owned subsidiary of Pubco. OpSec will hold approximately 97% of the issued and outstanding equity of its underlying operating subsidiaries. The Transactions are expected to close in the second half of 2023, subject to customary closing conditions, including the required approval by the shareholders of the Company. Other than pursuant to the terms and conditions set forth in the Backstop Agreement, there are no other financial closing conditions of the Transactions that would preclude closing once shareholder approval is obtained. Each Unit of the Company outstanding immediately prior to the Second Merger Effective Time shall be automatically detached and the holder thereof shall be deemed to hold one Class A ordinary share and one-half of a Warrant, which underlying securities shall be converted as set forth below and in accordance with the terms and conditions of the Business Combination Agreement. At the Second Merger Effective Time, by virtue of the Second Merger and without any further action required on the part of any Party or the holders of securities of the Company or Merger Sub II:
Concurrently with the Second Merger and after giving effect to the Share Cancellation described below, the Sponsor and certain shareholders of the Company (together with the Sponsor, the “Sponsor Members”) will sell and transfer to Pubco, and Pubco will purchase, the outstanding Class B ordinary shares in exchange for an equal number of Pubco Ordinary Shares and immediately after the Second Merger Effective Time each such Class B ordinary share will be converted into a Class A ordinary share. In connection with the Share Contribution, the OpSec Shareholders will receive, in aggregate, (1) 23,577,550 Pubco Ordinary Shares, (2) an aggregate amount in cash equal to $10,000,000 and (3) the right to receive in aggregate an additional 1,277,550 Pubco Ordinary Shares upon the satisfaction of either of the following conditions (each, “Triggering Event”):
In connection with the Business Combination Agreement, the Company entered into the following agreements: Backstop Agreement: Insider Letter Amendment: Sponsor Support Agreement: In connection with the Closing, the Company will enter into, among others, the following agreements: Lock-Up Agreement: lock-up agreement, pursuant to which, the OpSec Shareholders agree, subject to customary exceptions, not to transfer their Pubco Ordinary Shares during the period commencing on the date of the Share Contribution Closing and ending on the earlier of (1) the date that is nine months after the Share Contribution Closing and (2) the date on which Pubco undergoes a change of control. Registration Rights Agreement: Warrant Assignment, Assumption and Amendment: During the Company’s Second Extraordinary General Meeting on December 5, 2023, holders of public shares approved the proposal to extend the date by which the Company must complete its initial business combination from December 17, 2023 to June 17, 2024. On December 14, 2023, the Company entered into the first amendment to the Business Combination Agreement (the “First BCA Amendment”) with Pubco, OpSec and the OpSec Shareholders. The First BCA Amendment provided, among other things, that (1) holders of options granted by Orca (“Orca Options”) who are not executives of OpSec have the right to elect to cash out up to 10% of the Orca Options held by such holders, (2) the Orca Options granted to certain OpSec executives in February of 2023 were cancelled and (3) following the consummation of the Transactions, the board of directors of Pubco will consist of seven directors, three of whom shall be “independent directors” as defined under Rule 10A-3 of the Exchange Act, with three individuals designated by OpSec, two individuals designated by the Company and two individuals appointed jointly by OpSec and the Company. On March 10, 2024, the Company entered into a second amendment to the Business Combination Agreement (the “Second BCA Amendment”), which was entered into concurrently with a stock purchase agreement (the “Divestiture Agreement”) by Orca Midco and CA-MC Acquisition UK Ltd. (the “Divestiture Buyer”), pursuant to which, among other things, Orca Midco will sell, and the Divestiture Buyer will purchase, all of the issued and outstanding equity securities of Orca Bidco (the “Divestiture”). Prior to the execution of the Divestiture Agreement, OpSec effected a reorganization of its subsidiaries pursuant to which all of the issued and outstanding equity securities of Orca Holding Denmark APS (“Orca Denmark”), the parent entity of Zacco A/S (“Zacco”), became directly owned by Orca Midco (the “Reorganization”). As a result of the Reorganization, the Divestiture will effect a sale to the Divestiture Buyer of only the OpSec business, which is conducted through Orca Bidco and its subsidiaries (the “Divested Companies”), with the Zacco business being retained by Orca Midco. The Company is currently evaluating whether it is in the best interests of its shareholders to continue to pursue the Business Combination after the consummation of the Divestiture, as the consummation of the Business Combination following the consummation of the Divestiture will result in the Company effecting a business combination with the Zacco business. In connection with the Divestiture Agreement and the Second Amendment to the BCA, the Company entered into a letter agreement, dated March 10, 2024 (the “Consent”), with Pubco, the OpSec Shareholders, and Crane NXT, Co., a Delaware corporation (“NXT”), pursuant to which the Company consented to, among other things, OpSec effecting the Reorganization and Orca Midco entering into the Divestiture Agreement and consummating the Divestiture. Pursuant to the Consent, the Company also releases, relinquishes and discharges any and all existing or potential claims, causes of action and damages (i) against NXT and its affiliates solely in respect of matters relating to the Divestiture arising or occurring prior to the execution of the Divestiture Agreement, and (ii) if the Divestiture is consummated, against the Divested Companies, solely in respect of matters related to the Reorganization, the Divestiture, the Letter Agreement (as defined in the Consent) and the Business Combination Agreement. In connection with the Reorganization and the Divestiture, the Second BCA Amendment provides for, among other things, (i) that the net proceeds from the Divestiture be deposited in a third-party escrow account and the terms by which such proceeds may be released, (ii) a transition services agreement, (iii) a fairness opinion and (iv) the conversion of Class B ordinary shares, which was elected on December 22, 2023 and effected on January 2, 2024. Divestiture Proceeds If the Divestiture is consummated prior to the Second Merger Closing, then concurrently with the consummation of the Divestiture, Orca Midco shall cause the net proceeds of the Divestiture (the “Divestiture Proceeds”) to be deposited into a third-party escrow account (the “Divestiture Proceeds Escrow Account”) with an escrow agent reasonably acceptable to the Company. Such Divestiture Proceeds shall be held in the Divestiture Proceeds Escrow Account pursuant to an escrow agreement to be entered into by and among Orca Midco, Pubco, the Company and the escrow agent, in form and substance acceptable to the Company (the “Divestiture Proceeds Escrow Agreement”), such escrow agent holding such funds as nominee of and for the benefit of Orca Midco, the Company or Pubco, as applicable, subject always to the terms of the Business Combination Agreement and the Divestiture Proceeds Escrow Agreement. The Divestiture Proceeds shall, and the Divestiture Proceeds Escrow Agreement shall provide that the Divestiture Proceeds shall, be released from escrow and payable to (a) Pubco upon the Second Merger Closing, (b) the Company upon certain termination events as described further in the section below entitled “Termination” or (c) Orca Midco (i) upon an amount becoming due and payable by Orca Midco in accordance with the terms of the Divestiture Agreement, with such amount being subject to the review and reasonable confirmation of the Company, or (ii) in connection with a Proceeds Advance (as defined below) as described further in the section below entitled “Proceeds Advance”. The Company is a third-party beneficiary of the provisions of the Divestiture Agreement that give effect to the foregoing. If the funds from the Divestiture Proceeds Escrow Account are released to Pubco, Pubco will use such funds to (a) promptly pay (or cause to be promptly paid) all of the Company’s Expenses, and (b) within 14 days following the Second Merger Closing, to the extent permitted by applicable Law and subject to the determination of the Pubco Board that it is in the best interests of the holders of Pubco Ordinary Shares, make a dividend to all holders of Pubco Ordinary Shares in such amount as determined by the Pubco Board, which such dividend shall be paid in cash or, at the election of the applicable holder of such Pubco Ordinary Shares, in kind in Pubco Ordinary Shares. If declared, such dividend shall not be less than an amount as is necessary to enable ITSF to receive dividends in an amount which is, in the aggregate, equal to amount of any Proceeds Advance. In lieu of a dividend, the Pubco Board may also approve and effect a tender offer, repurchase of shares or other similar process by which the holders of Pubco Ordinary Shares receive the same economic benefit (including as regards the receipt of cash proceeds) as if a dividend had been declared. Divestiture Transition Matters Following the date of the Divestiture Agreement and prior to the consummation of the Divestiture, Orca Midco and the Divestiture Buyer shall use commercially reasonable efforts to negotiate and enter into, in form and substance reasonably acceptable to the Company, a transition services agreement in the form appended to the Divestiture Agreement, pursuant to which, among other things, Orca Midco and its Subsidiaries (including the Zacco Companies, but excluding the Divested Companies), on the one hand, and the Divestiture Buyer and the Divested Companies, on the other hand, shall provide certain transitional services to one another from and after the Divestiture Closing on the terms and conditions set forth therein. The Company is a third-party beneficiary of the provisions of the Divestiture Agreement that give effect to the foregoing. Prior to the consummation of the Divestiture, OpSec shall cause Orca Midco to negotiate and enter into, in form and substance reasonably acceptable to the Company, a transition services agreement, side letter or other agreement with each of Selva Selvaratnam and Beverly Dew pursuant to which, from and after the Divestiture Closing, each of them shall render all such services to Orca Midco and/or the Zacco Companies as shall be reasonably agreed between Orca Midco and each of Selva Selvaratnam and Beverly Dew, including providing support reasonably necessary to complete the Transactions. Fairness Opinion Following the execution of the Second BCA Amendment, the Company will use commercially reasonable efforts to obtain from an independent valuation firm a customary opinion that the exchange ratio, after giving effect to the consummation of the Divestiture and the consummation of the Transactions, is fair, from a financial point of view, to the Company’s public shareholders holding Class A ordinary shares (other than Sponsor) (the “Fairness Opinion”). In the event that the Company is unable to obtain the Fairness Opinion, (a) the number of Pubco Ordinary Shares issuable to the OpSec Shareholders at the Share Contribution Closing and (b) the number of Sponsor’s Founder Shares subject to the Share Cancellation shall be adjusted, in each case, to reflect an enterprise value (on a debt free, cash free basis) of the Zacco companies of $160,000,000 (subject to an increase or decrease by up to $16,000,000 to reflect the enterprise value stated in the Fairness Opinion); provided, that (i) any adjustments made pursuant to the foregoing clauses (a) and (b) are made pro rata and only to the extent necessary to enable the independent valuation firm to deliver the Fairness Opinion, and (ii) for the purposes of clause (b), all Founder Shares shall be treated as fully vested. Representations and Warranties; Covenants The Second BCA Amendment adds certain representations and warranties with respect to Zacco and its subsidiaries, including with respect to (a) its material contracts, (b) its ownership of intellectual property, (c) its top customers and suppliers and (d) the sufficiency of the assets of Zacco and its subsidiaries for the operation of the Zacco business. The Second BCA Amendment also requires OpSec to deliver a supplement to their disclosure schedules within 14 days of the execution of the Second BCA Amendment, which supplement will provide additional disclosures regarding the Zacco business. The Second BCA Amendment also added certain covenants regarding the operation of the Zacco business between the signing of the Second BCA Amendment and the consummation of the Transactions. Additionally, the covenants regarding the operation of OpSec and its subsidiaries have been amended to permit the Divestiture in accordance with the terms and subject to the conditions set forth in the Divestiture Agreement. Furthermore, OpSec will be required to deliver, as soon as reasonably practicable following the execution of the Second BCA Amendment, to Pubco and the Company (a) audited financial statements of the Zacco business for fiscal years 2022 and 2023 and (b) pro forma financial statements of OpSec reflecting the acquisition of the Zacco business and the Divestiture. The Second BCA Amendment also requires the company to use commercially reasonable efforts to obtain the approval of the Company’s shareholders to approve an extension of the period of time that the Company is afforded under its organizational documents to consummate a business combination from June 17, 2024 to December 17, 2024. To the extent such extension is approved, December 17, 2024 will automatically become the new the date upon which either the Company or OpSec may terminate the Business Combination Agreement in accordance with the terms thereof in the event that the Transactions have not yet been consummated. Termination The Second BCA Amendment adds a new right to terminate the Business Combination Agreement in favor of the Company in the event that (a) the Company is unable to obtain the Fairness Opinion or (b) the Special Committee has determined in good faith, after consultation with its outside legal counsel and other advisors, that the consummation of the Transactions following the consummation of the Divestiture is not in the best interests of the Company and the Company’s shareholders holding Class A ordinary shares (other than Sponsor) in accordance with the Cayman Companies Act. Such termination right may only be exercised by the Company within the two week period following the consummation of the Divesture (the “Post-Divestiture Termination Period”). The Second BCA Amendment also requires that certain amounts be paid by OpSec to the Company upon certain terminations of the Business Combination Agreement which amounts must be paid upon the earlier of (a) the consummation of the Divestiture and (b) the Extended Date. The amounts payable to the Company and the termination events triggering their payment are: (a) upon a termination by the Company or OpSec due to the failure of the Transactions to be consummated by the Extended Date, (i) $30,000,000 if such termination occurs during the Post-Divestiture Termination Period, and (ii) $25,000,000 if such termination occurs at any other time, in each case, so long as the Company is not the cause of such failure; (b) upon a termination by the Company or OpSec due to a governmental order that permanently prohibits the consummation of the Transactions, (i) $30,000,000 if such termination occurs during the Post-Divestiture Termination Period, and (ii) $25,000,000 if such termination occurs at any other time, in each case, so long as the Company is not the cause of such governmental order; (c) upon a termination by the Company due to a material breach of the Business Combination Agreement by OpSec or the OpSec Shareholders, $30,000,000 (or, alternatively, the Company may initiate an action against OpSec and/or the OpSec Shareholders to seek damages); and (d) upon a termination by the Company due to either (i) the inability of the Company to obtain the Fairness Opinion or (ii) a good faith determination by the Special Committee, after consultation with its outside legal counsel and other advisors, that the consummation of the Transactions following the consummation of the Divestiture is not in the best interests of the Company and the Company’s shareholders holding Class A ordinary shares (other than Sponsor) in accordance with the Cayman Companies Act, $30,000,000. Except for any amounts payable to the Company described in clause (d) above, all termination amounts payable to the Company shall be due and payable when such amounts have been (A) agreed in writing by the Company and OpSec or (B) determined by a court of competent jurisdiction. Proceeds Advance In the event that the Divestiture has been consummated and the Transactions have not been consummated by August 26, 2024, Orca Midco shall be provided an advance from the Divestiture Proceeds held in the Divestiture Proceeds Escrow Account (a “Proceeds Advance”) pursuant to a promissory note in form and substance acceptable to the Company in the principal amount of $73,800,000 on the same terms, structure and conditions, including, but not limited to, interest rate, security and guarantees, as ITSF’s current facility (the “Promissory Note”) to enable ITSF to satisfy its obligations under such facility for which payment will have been triggered by the consummation of the Divestiture. Once the Transactions have been consummated, the outstanding balance under the Promissory Note will be set off against any shareholder distributions made by Pubco which would otherwise have been payable to ITSF. Conversion of Class B Ordinary Shares The Second BCA Amendment provides for the conversion of the Class B ordinary shares into Class A ordinary shares, which was elected on December 22, 2023 and effected on January 2, 2024. Subscription Agreement On December 15, 2023, the Company entered into a subscription agreement (the “Subscription Agreement”) with Pubco, OpSec, and Sakata INX Corporation, a Japanese corporation (the “Subscriber”). Pursuant to the Subscription Agreement, the Subscriber subscribed for 5,000,000 unsecured convertible loan notes (the “Loan Notes”) of $1.00 each issued by OpSec for an aggregate purchase price of $5,000,000 (the “Note Subscription”). On the terms and subject to the conditions set forth in the Loan Notes, including the consummation of the First Merger, the Loan Notes will automatically be novated from OpSec to Pubco and simultaneously will convert into 526,316 Pubco Ordinary Shares (the “Subscription Shares”), par value $0.0001 per share (the “Share Subscription”). The closing of the Share Subscription will occur following the consummation of the First Merger and before the Second Merger (the “Closing”). The Subscription Agreement will terminate upon the earlier to occur of (1) such date and time as the Business Combination Agreement is validly terminated in accordance with its terms, (2) upon the mutual written agreement of each of the parties to the Subscription Agreement, (3) if any of the conditions to the Closing are not satisfied, or are not capable of being satisfied, on or prior to the Closing, and as a result thereof, the transactions contemplated by the Subscription Agreement will not be and are not consummated at the Closing and (4) one year from the date of the execution of the Subscription Agreement if the closing of the Business Combination has not occurred. Pursuant to the Subscription Agreement, Pubco has granted the Subscriber customary registration rights, on the terms and subject to the conditions set forth therein. At the Closing, Pubco and the Subscriber will enter into a
lock-up agreement, pursuant to which the Subscriber agrees, subject to customary exceptions, not to transfer the Subscription Shares during the period commencing on the date on which the Closing occurs and ending on the earlier of (1) the date that is 12 months after the Closing and (2) the date on which Pubco undergoes a change of control. |
Private Placement Warrants |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Private Placement Warrants [Abstract] | |
| Private Placement Warrants | Note 6—Private Placement Warrants Simultaneously with consummation of the IPO, the Sponsor purchased an aggregate of 16,700,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant ($16,700,000 in the aggregate). Each whole Private Placement Warrant is exercisable for one Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor were added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Extension Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
|
Related Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 7—Related Party Transactions Founder Shares On April 1, 2021, the Sponsor purchased 8,625,000 shares of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate purchase price of $25,000. On November 3, 2021, the Sponsor transferred 718,750 Founder Shares to Baroness Ruby McGregor-Smith, 479,167 Founder Shares to Peter McKellar, and 30,000 Founder Shares to each of Pam Jackson, Laurence Ponchaut and Adah Almutairi, at approximately $0.12 per share. On December 14, 2021, in connection with the increase in the size of the IPO, the Company effected a capitalization increasing the number of Founder Shares held by each initial shareholder by 20% , thereby increasing the aggregate number of issued and outstanding Founder Shares to 8,625,000. This resulted in a benefit to the Company from the excess fair value of shares issued over the nominal purchase price. The excess fair value of the Founder Shares over their nominal purchase price is estimated to be $5,292,600 and will be recorded as compensation expense upon closing of the Business Combination. The Sponsor and the Company’s directors and executive officers have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion of a Business Combination and (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary share equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days after a Business Combination, or (y) if the Company consummates a transaction after the initial Business Combination which results in shareholders having the right to exchange their shares for cash, securities or other property. On December 22, 2023, and effected on January 2, 2024, the Sponsor and certain directors and officers the Company voluntarily elected to convert an aggregate 8,624,999 Class B ordinary shares to Class A ordinary shares, par value $0.0001 per share, of the Company, on a one-for-one non-redeemable. Related Party Loans In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor may, but is not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At the lender’s discretion, up to $2,000,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The terms of the warrants would be identical to the terms of the Private Placement Warrants. On March 7, 2023, the Company entered into a non-interest bearing convertible unsecured loan (the “March 2023 Loan”) in the principal amount of up to $2,000,000 from one of the Sponsor’s affiliates to provide the Company with additional working capital and to fund the Extension Contributions. The portion of the March 2023 Loan used to provide the Company with additional working capital was not deposited into the Trust Account. If the Company does not consummate an initial business combination during the Extension Period, the March 2023 Loan will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The March 2023 Loan is convertible into private placement warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. The conversion option represents an embedded derivative under ASC 815-15, “Embedded Derivatives.” The Company has determined that based on the valuation of its Private Placement Warrants and the fact that a Business Combination is not considered probable until such time as it is consummated, the value of this conversion option is de minimis. In addition, on July 6, 2023, November 15, 2023, November 27, 2023 and April 15, 2024, the Company entered into non-interest bearing unsecured loans in the principal amount of up to $1,700,000 (the “July 2023 Loan”), in the principal amount of up to $500,000 (the “November 2023 Loan”), in the principal amount of up to $1,250,000 (the “Second November 2023 Loan”) and in the principal amount of up to $750,000 (the “April 2024 Loan”, together with the March 2023 Loan, the July 2023 Loan, the November 2023 Loan and the Second November 2023 Loan, the “Loans”) with an affiliate of the Sponsor to provide the Company with additional working capital and to fund monthly Extension Contribution payments into the Trust Account until the earlier of a completion of the Business Combination or the Extended Date. The portion of the Loans used to provide the Company with additional working capital were not deposited into the Trust Account. On December 5, 2023, in connection with Second Extraordinary General Meeting, the Sponsor agreed, by making monthly advancements on the Loans, to make Extension Contributions into the Trust Account in the amount of the lesser of (x) an aggregate of $150,000 or (y) $0.02 per share for each Class A ordinary share included as part of the Units sold in the Company’s IPO (including any shares issued in exchange thereof) that were not redeemed at the Second Extraordinary General Meeting for each monthly period (commencing on December 17, 2023 and ending on the 17th day of each subsequent month), or portion thereof, until the earlier of the completion of the initial business combination and June 17, 2024. The total amount outstanding under the Loans entered into described above as of March 31, 2024 was $5,450,000, of which $3,750,000 was utilized as Extension Contributions. As of December 31, 2023, there was $4,750,000 outstanding under the Loans, of which $3,300,000 was utilized as Extension Contr
ibu tions. |
Class A Ordinary Shares Subject to Possible Redemption |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Temporary Equity Disclosure [Abstract] | |
| Class A Ordinary Shares Subject to Possible Redemption | Note 8—Class A Ordinary Shares Subject to Possible R ed emption Class A Ordinary Shares— On March 14, 2023, at the First Extraordinary General Meeting, holders of Public Shares were afforded the opportunity to require the Company to redeem their Public Shares for their pro rate share of the Trust Account. 15,494,333 out of 34,500,000 Public Shares were redeemed at a redemption price of approximately $10.43 per share, leaving 19,005,667 Public Shares remaining outstanding. On December 5, 2023 at the Second Extraordinary General Meeting, holders of Public Shares were afforded the opportunity to require the Company to redeem their Public Shares for their pro rata share of the Trust Account. At the Second Extraordinary General Meeting, 7,460,372 out of 19,005,667 Public Shares were redeemed at a redemption price of $10.9972 which left 11,545,295 shares outstanding. On May 21, 2024, at the Third Extraordinary General Meeting, holders of Public Shares were afforded the opportunity to require the Company to redeem their Public Shares for their pro rata share of the Trust Account. At the Third Extraordinary General Meeting, 2,159,610 out of 11,545,295 Public Shares were redeemed at a redemption price of $11.32 which left 9,385,685 shares outstanding.
|
Shareholders' Deficit |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Stockholders' Equity Note [Abstract] | |
| Shareholders' Deficit | Note 9—Shareholders’ Deficit Preference Shares Class B Ordinary Shares Holders of Ordinary Shares will vote together as a single class on all matters submitted to a vote of shareholders except as required by law. On December 22, 2023, and effected on January 2, 2024, the Sponsor and certain directors and officers the Company voluntarily elected to convert an aggregate 8,624,999 Class B ordinary shares to Class A ordinary shares, par value $0.0001 per share, of the Company, on a one-for-one All of the terms and conditions applicable to the Class B ordinary shares set forth in the Letter Agreement, dated December 14, 2021 and as amended on April 25, 2023 and December 11, 2023, by and among the Company, its officers, its directors and the Sponsor (the “Letter Agreement”), shall continue to apply to the Class A ordinary shares into which the Class B ordinary shares converted, including the voting agreement, transfer restrictions and waiver of any right, title, interest or claim of any kind to the Trust Account (as defined in the Letter Agreement) or any monies or other assets held therein.
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Warrant Liabilities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Warrant Liabilities | Note 10—Warrant Liabilities Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination. The Company will not be obligated to deliver any Class A ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to Class A ordinary shares underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable, and the Company will not be obligated to issue any Class A ordinary shares upon exercise of a warrant unless the Class A ordinary share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Warrants. The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary share is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. Redemption of warrants when the price per Class ordinary share equals or exceeds $18.00.
If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.
In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00” and “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the Newly Issued Price, respectively. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and Class A ordinary shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of Class A ordinary shares as described above under Redemption of warrants for Class A ordinary shares). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants. The Company accounts for the 33,950,000 warrants issued in connection with the IPO (including 17,250,000 Public Warrants and 16,700,000 Private Placement Warrants) in accordance with the guidance contained in ASC
815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The warrant agreement contains an Alternative Issuance provision that if less than 70% of the consideration receivable by the holders of the Class A ordinary shares in the Business Combination is payable in the form of equity in the successor entity, and if the holders of the warrants properly exercises the warrants within thirty days following the public disclosure of the consummation of Business Combination by the Company, the warrant price shall be reduced by an amount equal to the difference. |
Commitments & Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments & Contingencies | Note 11—Commitments & Contingencies Registration Rights The holders of the Founder Shares and Private Placement Warrants (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights and shareholder agreement to be signed prior to or on the Effective Date of the IPO, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were granted the option to purchase up to 4,500,000 additional Units at the IPO price of $10.00 within 45 days of the consummation of the IPO. The underwriters fully exercised this option at the time of the IPO. The underwriters earned a cash underwriting discount of $0.20 per Unit, or $6,900,000 in the aggregate, which was paid upon the closing of the IPO. In addition, the underwriter will be entitled to a deferred fee of $0.35 per Unit, or $12,075,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. Legal Fees The Company has an agreement in place whereby if its legal counsel assists in the Business Combination efforts and the Business Combination is successful, it could receive up to $893,755 (the “Success Fee”). The Success Fee will only become due and payable in the event of a successful Business Combination. In accordance with ASC 805, Business Combinations, this fee will not be recorded until such time as a Business Combination is consummated. Consulting Agreements In April 2023, the Company entered into two agreements with each of the IPO underwriters, each to act as a capital markets advisor and as a placement agent in relation to the Business Combination. On June 9, 2023, the Company terminated the two engagement letters with one of the IPO underwriters, and such termination nullified the Company’s obligation to pay any fees under such agreements. With respect to the other IPO underwriter, as compensation for their services, half of a placement fee of 3.0% of the gross proceeds of securities sold in the placement will be paid to the agent upon consummation of the placement (the “Placement Fee”) and $4,000,000 will be paid to the agent upon consummation of the Business Combination (the “Transaction Fee”). The Placement Fee and the Transaction fee will only become payable in the event the placement and the Business Combination are consummated, respectively, and as such nothing will be recorded until that time. In June 2023, the Company entered into an agreement with a third-party consultant to provide advisory services in relation to the Business Combination. As compensation for those services, an advisory fee of $2,000,000 is payable in the event the transaction is consummated (the “Advisory Fee”). This fee will only become payable in the event the Business Combination is consummated and as such nothing will be recorded until that time. Additionally, the agent and the consultant are eligible to be reimbursed in the aggregate up to $500,000 in expenses in the event the Business Combination is not consummated and $1,000,000 in the event it is consummated. As of March 31, 2024, approximately $1,185,000 has been incurred by the third parties. As the Business Combinatio
n is not yet considered probable, $500,000 of the approximately $1,185,000 is accrued in the Accounts Payable and Accrued Expenses line on the balance sheet. |
Recurring Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recurring Fair Value Measurements | Note 12—Recurring Fair Value Measurements The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:
Cash Held in Trust Account As of March 31, 2024, the assets held in the Trust Account were held in a bank account. On December 14, 2023, in order to mitigate the potential risks of being deemed to have been operating as an unregistered investment company for purposes of the Investment Company Act, the Company instructed Continental to liquidate the U.S. government treasury obligations and money market funds held in the Trust Account and to hold all funds in the Trust Account in cash in an interest-bearing bank demand deposit account until the earlier of consummation of the Company’s initial business combination or liquidation. During the period from March 22, 2021 (inception) through March 31, 2024, the Company did not withdraw any of the interest income from the Trust Account to pay its tax obligations. The composition of the Company’s fair value of assets held in the Trust Account on March 31, 2024 and December 31, 2023 is as follows:
Warrant Liabilities As of March 31, 2024, the Company’s warrant liabilities were valued at $1,188,250. Under the guidance in ASC 815-40, the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment. As such, the Public Warrants and the Private Warrants must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the warrant liabilities is classified within Level 3 of the fair value hierarchy. The Company established the initial fair value for the warrants on December 17, 2021, the date of the consummation of the Company’s IPO. The fair value of the Public Warrants and the Private Placement Warrants were measured using a Monte Carlo simulation model. The estimated fair value of the Public Warrants and the Private Placement Warrants were determined using Level 3 inputs. The Monte Carlo simulation utilizes certain known inputs such as the Company’s stock price, the warrant exercise price, the time to expiration and the fact that there is a call condition. The risk-free interest rate is based on the U.S. Treasury curve. The expected life of the instruments are assumed to be equivalent to their remaining contractual term plus the amount of time assumed to consummate a Business Combination. Additionally, inherent in a Monte Carlo simulation model is an assumption related to the unknown expected share-price volatility. The Company estimates the implied volatility of its warrants based on the volatility required to produce a model price equal to the market price for the Company’s Public Warrants. The following table presents a summary of the changes in the fair value of the Warrants liabilities classified as Level 3, measured on a recurring basis.
The following table provides the significant inputs into the Monte Carlo method for the fair value of the Public and Private Warrants:
Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. The Public Warrants underlying the Units sold in the IPO began separately trading on February 3, 2022 and as such were reclassified to Level 1 in the quarter ended March 31, 2022. There were no other transfers in or out of Level 3 from other levels in the fair value hierarchy for the three months ended March 31, 2024.
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Subsequent Events |
3 Months Ended |
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Mar. 31, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Note 13—Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based on this review, the Company did not identify any subsequent events, other than those detailed below, that would have required adjustment or disclosure in the financial statement. On April 15, 2024, the Company entered into a non-interest unsecured loan in the principal amount of up to $750,000 - bearing(the “April 2024 Loan”) with an affiliate of the Sponsor to provide the Company with additional working capital and to fund Extension Contributions into the Trust Account until the earlier of a completion of the Business Combination or December 17, 2024. The April 2024 Loan bears no interest and shall be due and payable on the earlier of (i) the date on which the Company consummates a business combination or (ii) the date of that the winding up of the Company is effective. If the Company does not consummate an initial business combination by the Extended Date, the April 2024 Loan will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. If at any time the board of directors of the Company determines that the Company will not be able to consummate an initial business combination by the Extended Date and that the Company shall instead liquidate, the Sponsor’s obligation to continue to make the Extension Contributions shall cease immediately upon such determination. In connection with the April 2024 Loan, on April 16, 2024, the company engaged in a drawdown of $150,000 and $200,000 to fund Extension Contributions and to provide the Company with working capital, respectively. In addition, the Company engaged in a drawdown of $150,000 on May 2, 2024 and $150,000 on May 16, 2024 to further provide the Company with working capital and to fund Extension Contributions, respectively. On May 3, 2024, the Company entered into a third amendment to the Business Combination Agreement (the “Third BCA Amendment” and, the Original Business Combination Agreement, as amended by the First BCA Amendment, the Second BCA Amendment and the Third BCA Amendment, the “Business Combination Agreement”), with Pubco, OpSec and the OpSec Shareholders. The Third BCA Amendment provides, among other things, that: (a) the Purchase Price for the Divestiture that will be deposited into the Divestiture Proceeds Escrow Account if the Divestiture is consummated prior to the Second Merger Closing will be reduced by certain fees, costs and expenses as set forth on Schedule IX of the Business Combination Agreement (the “Specified Transaction Expenses”); (b) concurrently with or promptly following the consummation of the Divestiture, the Specified Transaction Expenses shall be paid to the payees in the amounts set forth on Schedule IX of the Business Combination Agreement, and, if the Share Contribution is consummated, such advance of the Specified Transaction Expenses shall be treated as a partial payment by Orca Midco of Pubco’s obligation to bear the Expenses of the Target Companies in accordance with the terms of the Business Combination Agreement; (c) promptly following the consummation of the Divestiture, Pubco, Orca Midco and the Company shall instruct the Escrow Agent to release from the Divestiture Proceeds Escrow Account to the Company (or such other person as the Company directs) an amount equal to $7,800,000 in connection with the settlement of the Company’s Expenses (the “Specified Company Transaction Expenses”), and, if the Share Contribution is consummated, such advance of the Specified Company Transaction Expenses shall be treated as a partial payment by Orca Midco of Pubco’s obligation to bear the Company’s Expenses in accordance with the terms of the Business Combination Agreement; (d) Orca Midco shall have the right to receive an advance from the funds held in the Divestiture Proceeds Escrow Account in an amount equal to (i) the First Distribution Amount of $3,000,000 if the Second Merger Closing has not occurred prior to May 28, 2024 and (ii) the Second Distribution Amount of $73,800,000 less the First Distribution Amount to the extent the First Distribution Amount has been released to Orca Midco prior to the release of the Second Distribution Amount to Orca Midco pursuant to and in accordance with the terms of the Business Combination Agreement, if the Second Merger Closing has not occurred prior to August 26, 2024; (e) in the event that the Special Committee has determined in good faith, after consultation with its outside legal counsel and other advisors, that the consummation of the Transactions following the consummation of the Divestiture is not in the best interests of the Company and the Company’s shareholders holding Class A ordinary shares (other than the Sponsor) in accordance with the Cayman Companies Act, the Company shall have the right to terminate the Business Combination Agreement during the period following the consummation of the Divestiture and ending on and including August 10, 2024; (f) (i) upon a termination of the Business Combination Agreement by the Company or OpSec due to the failure of the Transactions to be consummated by the Extended Date or (ii) upon a termination of the Business Combination Agreement by the Company or OpSec due to a governmental order that permanently prohibits the consummation of the Transactions, the Termination Amount payable to the Company shall be $30,000,000 so long as written notice of such termination is provided during the period following the Divestiture Closing and ending on and including August 10, 2024; and (g) the Termination Amount to be paid by Orca Midco to the Company upon certain terminations of the Business Combination Agreement shall be reduced by the amount of the Specified Company Transaction Expenses plus notional interest accruing daily from the date the Specified Company Transaction Expenses are advanced to the Company (or such other person as the Company directs) up to and including the date of termination of the Business Combination Agreement at a rate of 8% per annum. On May 7, 2024, in connection with the Divestiture Agreement, the Second Amendment to the BCA and the Consent dated March 10, 2024, the Company consummated the Divestiture, pursuant to which, among other things, Orca Midco sold, and the Divestiture Buyer purchased, all of the issued and outstanding equity securities of Orca Bidco. In addition, Company also released certain claims against NXT and its affiliates and the Divested Companies related to the Reorganization and the Divestiture. Subsequent to March 31, 2024 but prior to the issuance of these financial statements, the Company has made two Extension Contribution payments pursuant to the April 2024 Loan in the amount of $150,000 each. On May 21, 2024, the Company held the Third Extraordinary General Meeting to vote on the Third Extension Amendment Proposal to approve an Amendment to the Company’s Articles extending the date by which the Company must complete its initial business combination from June 17, 2024 to December 17, 2024, and the stockholders approved the Third Extension Amendment Proposal at that meeting. In connection with the vote to approve the Third Extension Amendment Proposal, the holders o f 2,159,610 Class A ordinary shares properly exercised their rights to redeem their shares for cash. In connection with these redemptions, approximately $24.4 million was withdrawn from the trust account to fund such redemptions. |
Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of Presentation The accompanying unaudited condens ed financial statements have b een prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K for the year ended December 31, 2023, as filed with the SEC on April 11, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2023, is derived from the audited financial statements presented in the Company’s Annual Report on Form 10- K for the year ended December 31, 2023, as filed with the SEC on April 11, 2024. |
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| Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
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| Use of Estimates | Use of Estimates The preparation of these financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
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| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, which include short-term bank deposits that are not restricted as to withdrawal or use, and short-term debentures, with original periods to maturity not exceeding three months, to be cash equivalents. The Company had cash of $43,922 and $98,676 as of March 31, 2024 and December 31, 2023, respectively. The Company had no cash equivalents as of March 31, 2024 and December 31, 2023.
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| Cash Held in Trust Account | Cash Held in Trust Account Investments in money market funds are recognized at fair value and are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income from marketable securities held in the Trust Account in the accompanying statement of operations. The estimated fair values of marketable securities held in the Trust Account are determined using available market information. As of March 31, 2024 and December 31, 2023, the assets held in the Trust Account consisted of cash and money market mutual funds in the amount of $129,619,541 and $127,703,238, respectively.
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| Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of March 31, 2024, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
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| Offering Costs Associated with Initial Public Offering | Offering Costs Associated with Initial Public Offering The Company complies with the requirements of the ASC
340-10-S99-1 one-half of one redeemable warrant (“Public Warrants”) and the Private Placement Warrants to the proceeds received from the Units sold upon the completion of the IPO. Accordingly, on December 17, 2021 offering costs totaling $20,078,227 (consisting of $6,900,000 of underwriting fee, $12,075,000 of deferred underwriting fee and $1,103,227 of other offering costs) were recognized with $854,057 included in accumulated deficit as an allocation for the Public Warrants and the Private Placement Warrants. Subsequent to the IPO, upon invoice receipt, other offering costs were adjusted downwards by $94,443 to true up estimates to the actual expenses incurred. |
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| Net Income (Loss) Per Ordinary Share | Net Income (Loss) Per Ordinary Share The Company’s statements of operations include a presentation of net income (loss) per share for Ordinary Shares subject to possible redemption and applies the two-class method in calculating net income (loss) per share. Net income (loss) per ordinary share, basic and diluted, is calculated by dividing the pro- rata allocation of net income (loss) for each class, by the weighted average number of Class A and Class B non-redeemable ordinary shares outstanding for the period. Net income (loss) is allocated pro-rata between Class A redeemable and Class B non-redeemable shares based on their respective weighted average shares outstanding for the period. As of March 31, 2024, the potential Ordinary Shares for outstanding Public and Private Warrants to purchase the Company’s Ordinary Shares were excluded from diluted earnings per share for the three months ended March 31, 2024 because they are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the period. The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
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| Fair Value Measurements | Fair Value Measurements The Company applies ASC 820, which establishes a framework for measuring fair value and clarifies the definition of fair value within that framework. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market data and the entity’s judgments about the assumptions that market participants would use in pricing the asset or liability and are to be developed based on the best information available in the circumstances. Level 1—Assets and liabilities with unadjusted, quoted prices listed on active market exchanges. Inputs to the fair value measurement are observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2—Inputs to the fair value measurement are determined using prices for recently traded assets and liabilities with similar underlying terms, as well as direct or indirect observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3—Inputs to the fair value measurement are unobservable inputs, such as estimates, assumptions, and valuation techniques when little or no market data exists for the assets or liabilities. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
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| Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. The 33,950,000 warrants issued in connection with the IPO and the Private Placement (including the 17,250,000 Public Warrants included in the Units and the 16,700,000 Private Placement Warrants) were recognized as derivative liabilities in accordance with ASC 815. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject
to re-measurement at each balance sheet date until exercised. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities. |
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| Ordinary Shares Subject to Possible Redemption | Ordinary Shares Subject to Possible Redemption The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable Ordinary Shares (including Ordinary Shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, Ordinary Shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, as of March 31, 2024 and December 31, 2023, Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet. Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount. Increases or decreases in the carrying amount of redeemable Ordinary Shares are affected by charges against additional paid-in capital and accumulated deficit. As of March 31, 2024 and December 31, 2023, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
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| Income taxes | Income taxes The Company accounts for income taxes in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under the asset and liability method, as required by this accounting standard, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to the period when assets are realized or liabilities are settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. There were no unrecognized tax benefits as of March 31, 2024. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2024, there were no unrecognized tax benefits, and no amounts were accrued for the payment of interest and penalties. There is currently no taxation imposed by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). The update simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options for convertible instruments and introducing other changes. As a result of ASU 2020-06, more convertible debt instruments will be accounted for as a single liability measured at amortized cost and more convertible preference shares will be accounted for as a single equity instrument measured at historical cost, as long as no features require bifurcation and recognition as derivatives. The amendments are effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted ASU 2020-06 upon inception. The impact to the balance sheet, statements of operations and cash flows was not material. In December 2023, the FASB issued ASU No 2023-09, “Income Taxes (Topic 740)—Improvements to Income Tax Disclosures” (“ASU 2023-09”) in order to enhance the transparency and usefulness of income tax disclosures. The guidance is applicable to all entities subject to income tax, and it will require disclosure of certain categories within the rate reconciliation to improve consistency as well as disclosure of reconciling items which meet a certain quantitative threshold which will improve transparency. Additionally, entities must disclose the amount of taxes paid to federal, state and foreign municipalities. For public business entities ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company expects to adopt the standard for the fiscal year beginning December 31 , 2024. The Company is currently evaluating the impact of its pending adoption of ASU 2023-09 on its financial position, results of operations or financial statement disclosure. Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
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Revision to Prior Period Financial Statements (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prior Period Adjustment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of the audited financial statements | The audited financial statements as of December 31, 2023 are revised as follows:
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Significant Accounting Policies (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Basic and Diluted Net Income Per Ordinary Share | The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):
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| Summary of Class A Ordinary Shares Subject to Possible Redemption | As of March 31, 2024 and December 31, 2023, the Class A ordinary shares subject to possible redemption reflected in the balance sheet are reconciled in the following table:
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Recurring Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Fair Value Assets and Liabilities | The following table sets forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:
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| Summary of Fair Value of Held To Maturity Securities | The composition of the Company’s fair value of assets held in the Trust Account on March 31, 2024 and December 31, 2023 is as follows:
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| Summary of Fair Value of Warrants Liabilities | The following table presents a summary of the changes in the fair value of the Warrants liabilities classified as Level 3, measured on a recurring basis.
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| Summary of Fair Value Measurement Inputs and Valuation Techniques | The following table provides the significant inputs into the Monte Carlo method for the fair value of the Public and Private Warrants:
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Significant Accounting Policies - Additional Information (Detail) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Dec. 17, 2021 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 14, 2023 |
|
| Cash | $ 43,922 | $ 98,676 | ||
| Cash Equivalents | 0 | 0 | ||
| Cash, FDIC Insured Amount | 250,000 | |||
| Accumulated deficit | (30,380,554) | (33,083,482) | ||
| Marketable securities held in Trust Account | 129,619,541 | $ 127,703,238 | $ 198,200,000 | |
| Accrued for interest and penalties | $ 0 | |||
| Effective Income Tax Rate Reconciliation, Percent | 50.00% | |||
| Unrecognized Tax Benefits | $ 0 | |||
| Class of warrant or right, outstanding | 33,950,000 | |||
| Other Offering Cost Adjustments | $ 94,443 | |||
| Private Placement Warrants [Member] | ||||
| Class of warrant or right, outstanding | 16,700,000 | |||
| Public Warrants [Member] | ||||
| Class of warrant or right, outstanding | 17,250,000 | |||
| IPO And Private Placement [Member] | Warrant [Member] | ||||
| Offering costs | 20,078,227 | |||
| Underwriting fee | 6,900,000 | |||
| Accumulated deficit | 854,057 | |||
| Deferred underwriting fee | 12,075,000 | |||
| Other offering costs | $ 1,103,227 |
Significant Accounting Policies - Summary of Basic and Diluted Net Income Per Ordinary Share (Detail) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
| Redeemable Class A ordinary shares [Member] | |||
| Numerator: | |||
| Allocation of net income (loss) | $ 2,608,114 | $ (1,652,296) | |
| Denominator: | |||
| Weighted-average shares outstanding, Basic | 11,545,295 | 30,712,496 | |
| Weighted-average shares outstanding, Diluted | 11,545,295 | 30,712,496 | |
| Basic net income (loss) per share | $ 0.23 | $ (0.05) | $ (0.16) |
| Diluted net income (loss) per share | $ 0.23 | $ (0.05) | (0.16) |
| Non-Redeemable ordinary shares [Member] | |||
| Numerator: | |||
| Allocation of net income (loss) | $ 1,948,411 | $ (464,015) | |
| Denominator: | |||
| Weighted-average shares outstanding, Basic | 8,625,000 | 8,625,000 | |
| Weighted-average shares outstanding, Diluted | 8,625,000 | 8,625,000 | |
| Basic net income (loss) per share | $ 0.23 | $ (0.05) | (0.16) |
| Diluted net income (loss) per share | $ 0.23 | $ (0.05) | $ (0.16) |
Significant Accounting Policies - Summary of Class A Ordinary Shares Subject to Possible Redemption (Detail) - USD ($) |
3 Months Ended | 12 Months Ended | 15 Months Ended | |
|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Mar. 31, 2024 |
|
| Plus: | ||||
| Extension Contribution | $ 450,000 | $ 350,000 | $ 3,750,000 | |
| Class A ordinary shares subject to possible redemption [Member] | ||||
| As of beginning of the period, January 1 | 127,765,944 | $ 356,976,644 | $ 356,976,644 | 356,976,644 |
| Less: | ||||
| Redemptions as a result of Special Shareholder Meeting | 0 | (243,649,972) | ||
| Plus: | ||||
| Extension Contribution | 450,000 | 3,300,000 | ||
| Remeasurement of carrying value to redemption value | 1,403,597 | 11,139,272 | ||
| Class A ordinary shares subject to possible redemption | $ 129,619,541 | $ 127,765,944 | $ 129,619,541 | |
Private Placement Warrants - Additional Information (Detail) - Private Placement [Member] |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
USD ($)
$ / shares
shares
| |
| Common Class A [Member] | |
| Private Placement Warrants [Line Items] | |
| Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.5 |
| Sponsor [Member] | |
| Private Placement Warrants [Line Items] | |
| Class of warrants and rights issued during the period | shares | 16,700,000 |
| Class of warrants and rights issued price per warrant | $ 1 |
| Proceeds from Issuance of Private Placement | $ | $ 16,700,000 |
Recurring Fair Value Measurements - Summary of Fair Value of Held To Maturity Securities (Detail) - USD ($) |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Cash [Member] | ||
| Schedule of Held-to-maturity Securities [Line Items] | ||
| Cash held in Trust Account | $ 129,619,541 | $ 127,703,238 |
Recurring Fair Value Measurements - Summary of Fair Value of Warrants Liabilities (Detail) - Private Placement Warrants [Member] |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
USD ($)
| |
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
| Fair value beginning balance | $ 3,828,000 |
| Change in fair value | $ (3,243,500) |
| Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants |
| Fair value ending balance | $ 584,500 |
Recurring Fair Value Measurements - Summary of Fair Value Measurement Inputs and Valuation Techniques (Detail) - Level 3 [Member] |
Mar. 31, 2024
yr
|
Dec. 31, 2023
yr
|
|---|---|---|
| Share price [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 11.27 | 11.02 |
| Exercise price [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 11.5 | 11.5 |
| Risk-free rate of interest [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 4.21 | 3.84 |
| Volatility [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 0.001 | 15.88 |
| Term (in years) [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 5.21 | 5.06 |
| Dividend yield [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Measurement inputs | 0 | 0 |
Recurring Fair Value Measurements - Additional Information (Detail) |
3 Months Ended |
|---|---|
|
Mar. 31, 2024
USD ($)
| |
| Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
| Warrant liabilities | $ 1,188,250 |
| FairValue Derivative Asset Liability Measured On Recurring , Transfers Net | $ 0 |
1 Year Investcorp Europe Acquis... Chart |
1 Month Investcorp Europe Acquis... Chart |
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