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 or organization) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
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(Address Of Principal Executive Offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-fourth of one redeemable warrant |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page |
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Item 1. |
1 | |||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. |
20 | |||||
Item 3. |
26 | |||||
Item 4. |
26 | |||||
Item 1. |
27 | |||||
Item 1A. |
27 | |||||
Item 2. |
27 | |||||
Item 3. |
27 | |||||
Item 4. |
27 | |||||
Item 5. |
27 | |||||
Item 6. |
28 |
June 30, 2022 |
December 31, 2021 |
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(unaudited) |
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Assets: |
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Current assets: |
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Cash |
$ | $ | ||||||
Prepaid expenses |
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Total current assets |
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Investments held in Trust Account |
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Total Assets |
$ |
$ |
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Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit: |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued expenses |
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Accrued expenses - related party |
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Working capital loan - related party |
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Total current liabilities |
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Deferred underwriting commissions |
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Derivative warrant liabilities |
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Total liabilities |
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Commitments and Contingencies |
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Class A ordinary shares subject to possible redemption, $ |
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Shareholders’ Deficit: |
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Preference shares, $ |
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Class A ordinary shares, $ non-redeemable shares issued or outstanding as of June 30, 2022 and December 31, 2021 |
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Class B ordinary shares, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Total shareholders’ deficit |
( |
) | ( |
) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit |
$ |
$ |
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For the Three Months Ended June 30, |
For the Six Months Ended June 30, | |||||||||||||||
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2022 |
2021 |
2022 |
2021 |
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General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
General and administrative expenses - related party |
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Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expenses): |
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Offering costs associated with derivative warrant liabilities |
( |
) | ||||||||||||||
Loss upon issuance of private placement warrants |
( |
) | ||||||||||||||
Change in fair value of derivative warrant liabilities |
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Income from investments held in Trust Account |
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Net income |
$ |
$ |
$ |
$ |
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Weighted average shares outstanding of Class A ordinary shares |
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Basic and diluted net income per share, Class A ordinary shares |
$ |
$ |
$ |
$ |
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Weighted average shares outstanding of Class B ordinary shares |
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Basic and diluted net income per share, Class B ordinary shares |
$ |
$ |
$ |
$ |
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Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Deficit |
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Class A |
Class B |
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Shares |
Amount |
Shares |
Amount |
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Balance - December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance - March 31, 2022 (Unaudited) |
( |
) |
( |
) | ||||||||||||||||||||||||
Increase in redemption value of Class A ordinary shares subject to possible redemption |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance - June 30, 2022 (Unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
|
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|
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|
Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Equity (Deficit) |
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Class A |
Class B |
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Shares |
Amount |
Shares |
Amount |
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Balance - December 31, 2020 |
$ |
$ |
$ |
$ |
( |
) |
$ |
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Accretion of Class A ordinary shares subject to redemption |
— | — | — | — | ( |
) | ( |
) | ( |
) | ||||||||||||||||||
Net loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
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Balance - March 31, 2021 (Unaudited) |
( |
) |
( |
) | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance - June 30, 2021 (Unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
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For the Six Months Ended June 30, |
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2022 |
2021 |
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Cash Flows from Operating Activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash used in operating activities: |
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General and administrative expenses paid by related party under promissory note |
— | |||||||
Loss upon issuance of private placement warrants |
— | |||||||
Offering costs associated with derivative warrant liabilities |
— | |||||||
Change in fair value of derivative warrant liabilities |
( |
) | ( |
) | ||||
Income from investments held in Trust Account |
( |
) | ( |
) | ||||
Changes in operating assets and liabilities: |
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Prepaid expenses |
( |
) | ||||||
Accounts payable |
||||||||
Accrued expenses |
( |
) | ||||||
Accrued expenses - related party |
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Net cash used in operating activities |
( |
) | ( |
) | ||||
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Cash Flows from Investing Activities: |
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Cash deposited in Trust Account |
( |
) | ||||||
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Net cash used in investing activities |
( |
) | ||||||
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Cash Flows from Financing Activities: |
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Proceeds received from working capital loan - related party |
— | |||||||
Repayment of note payable to related party |
( |
) | ||||||
Proceeds received from initial public offering, gross |
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Proceeds received from private placement |
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Offering costs paid |
— | ( |
) | |||||
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Net cash provided by financing activities |
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Net change in cash |
( |
) | ||||||
Cash - beginning of the period |
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Cash - end of the period |
$ |
$ |
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Supplemental disclosure of noncash financing activities: |
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Offering costs included in accounts payable |
$ | — | $ | |||||
Offering costs included in accrued expenses |
$ | — | $ | |||||
Offering costs paid by related party under promissory note |
$ | — | $ | |||||
Deferred underwriting commissions |
$ | — | $ |
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For The Three Months Ended June 30, 2022 |
For The Six Months Ended June 30, 2022 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income per ordinary share: |
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Numerator: |
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Allocation of net income |
$ | $ | $ | $ | ||||||||||||
Denominator: |
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Basic and diluted weighted average ordinary shares outstanding |
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Basic and diluted net income per ordinary share |
$ | $ | $ | $ | ||||||||||||
For The Three Months Ended June 30, 2021 |
For The Six Months Ended June 30, 2021 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income per ordinary share: |
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Numerator: |
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Allocation of net income |
$ | $ | $ | $ | ||||||||||||
Denominator: |
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Basic and diluted weighted average ordinary shares outstanding |
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Basic and diluted net income per ordinary share |
$ | $ | $ | $ | ||||||||||||
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $ |
• | in whole and not in part; |
• | at $ |
• | if, and only if, the closing price of Class A ordinary shares equals or exceeds $ |
• | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
Gross proceeds from Initial Public Offering |
$ | |
||
Less: |
||||
Fair value of Public Warrants at issuance |
( |
) | ||
Offering costs allocated at Class A ordinary shares subject to possible redemption |
( |
) | ||
Plus: |
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Accretion on Class A ordinary shares subject to possible redemption |
||||
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|
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Class A ordinary shares subject to possible redemption as of December 31, 2021 |
||||
Increase in redemption value of Class A ordinary shares subject to possible redemption |
||||
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|
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Class A ordinary shares subject to possible redemption as of June 30, 2022 |
$ | |||
|
|
Fair Value Measured as of June 30, 2022 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets: |
||||||||||||||||
Investments held in Trust Account |
$ |
$ |
— |
$ |
— |
$ |
||||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liabilities - public warrants |
$ |
$ |
— |
$ |
— |
$ |
||||||||||
Derivative warrant liabilities - private placement warrants |
$ |
— |
$ |
— |
$ |
$ |
Fair Value Measured as of December 31, 2021 |
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Level 1 |
Level 2 |
Level 3 |
Total |
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Assets: |
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Investments held in Trust Account |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities: |
||||||||||||||||
Derivative warrant liabilities - public warrants |
$ | $ | — | $ | — | $ | ||||||||||
Derivative warrant liabilities - private placement warrants |
$ | — | $ | — | $ | $ |
As of June 30, 2022 |
As of December 31, 2021 |
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Share Price |
$ | $ | ||||||
Exercise Price |
$ | $ | ||||||
Option Term (in years) |
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Volatility |
% | % | ||||||
Risk-free interest rate |
% | % | ||||||
Expected Dividends |
% | % |
Derivative warrant liabilities at January 1, 2022 |
$ | |||
Issuance of Public and Private Warrants |
( |
) | ||
|
|
|||
Derivative warrant liabilities at March 31, 2022 |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
|||
Derivative warrant liabilities at June 30, 2022 |
$ | |||
|
|
Derivative warrant liabilities at January 1, 2021 |
$ | |||
Issuance of Public and Private Warrants |
||||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
|||
Derivative warrant liabilities at March 31, 2021 |
||||
Transfer of Public Warrants to a Level 1 measurement |
( |
) | ||
Change in fair value of derivative warrant liabilities |
( |
) | ||
|
|
|||
Derivative warrant liabilities at June 30, 2021 |
$ | |||
|
|
• | may significantly dilute the equity interest of investors in the Initial Public Offering, 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 |
• | 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 Class A ordinary shares and/or warrants. |
• | 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; |
• | 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. |
* | Filed herewith. |
** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
Dated: August 15 , 2022 |
ARCTOS NORTHSTAR ACQUISITION CORP. | |||||
By: | /s/ John Vedro | |||||
Name: | John Vedro | |||||
Title: | Chief Financial Officer and Authorized Signatory |