UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the
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Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes
As of August 18, 2023,
CATCHA INVESTMENT CORP
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2023
TABLE OF CONTENTS
i
PART I - FINANCIAL INFORMATION
ITEM 1. INTERIM FINANCIAL STATEMENTS
CATCHA INVESTMENT CORP
CONDENSED BALANCE SHEETS
| March 31, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Cash and investments held in Trust Account | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Due to Related Party | ||||||||
| Promissory Note - Related Party, at fair value | ||||||||
| Working Capital Loan, at fair value | ||||||||
| Capital Contribution Note, at fair value | ||||||||
| Total current liabilities | ||||||||
| Warrant liability | ||||||||
| Deferred underwriting fees | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies (Note 8) | ||||||||
| Class A ordinary shares subject to possible redemption, | ||||||||
| Shareholders’ Deficit: | ||||||||
| Class A ordinary shares, $ | ||||||||
| Class B ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficit | ( | ) | ( | ) | ||||
| Total Liabilities and Shareholders’ Deficit | $ | $ | ||||||
See accompanying notes to the unaudited condensed financial statements.
1
CATCHA INVESTMENT CORP
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
| For the Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Formation and operating costs | $ | $ | ||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income from Trust Account | ||||||||
| Excess of fair value of Capital Contribution Note over proceeds at issuance | ( | ) | ||||||
| Change in fair value of Convertible Promissory Notes | ( | ) | ||||||
| Change in fair value of Capital Contribution Note | ( | ) | ||||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Total other income (expense), net | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| $ | ( | $ | ||||||
| $ | ( | $ | ||||||
See accompanying notes to the unaudited condensed financial statements.
2
CATCHA INVESTMENT CORP
UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2023
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-In | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance as of January 1, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Accretion of interest income to Class A shares subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Excess of proceeds from convertible notes over fair value at issuance | — | — | ||||||||||||||||||||||||||
| Additional deposits to Trust Account for extension | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
See accompanying notes to the unaudited condensed financial statements.
3
CATCHA INVESTMENT CORP
UNAUDITED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2022
| Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-In | Accumulated | Shareholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance as of January 1, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Accretion of interest income to Class A shares subject to redemption | — | — | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of March 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
See accompanying notes to the unaudited condensed financial statements.
4
CATCHA INVESTMENT CORP
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
| For the Three months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Interest income from Trust Account | ( | ) | ( | ) | ||||
| Excess of fair value of Capital Contribution Note over proceeds at issuance | ||||||||
| Change in fair value of warrant liability | ( | ) | ||||||
| Change in fair value of convertible promissory notes | ||||||||
| Change in fair value of Capital Contribution Note | ||||||||
| Changes in current assets and current liabilities: | ||||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Due to related party | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Cash deposited in Trust Account | ( | ) | ||||||
| Cash withdrawn from Trust Account in connection with redemption | ||||||||
| Net cash provided by investing activities | ||||||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from issuance of Working Capital Loan | ||||||||
| Proceeds from issuance of promissory note to related party | ||||||||
| Proceeds from issuance of capital contribution note | ||||||||
| Redemption of Class A ordinary shares | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Net Change in Cash | ( | ) | ||||||
| Cash - Beginning of the period | ||||||||
| Cash - End of the period | $ | $ | ||||||
| Supplemental Disclosure of Non-cash Financing Activities: | ||||||||
| Accretion of interest income to Class A shares subject to possible redemption | $ | $ | ||||||
| Accretion of extension deposits to Class A shares subject to possible redemption | $ | |||||||
| Excess of proceeds from convertible notes over fair value at issuance | $ | $ | ||||||
See accompanying notes to the unaudited condensed financial statements.
5
CATCHA INVESTMENT CORP
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2023
NOTE 1. ORGANIZATION AND BUSINESS OPERATION
Organization and General
Catcha Investment Corp (the “Company”) was incorporated as a Cayman Islands exempted company on December 17, 2020. The Company was incorporated for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities (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, 2023, the Company had not commenced any operations. All activity through March 31, 2023 relates to the Company’s formation, the initial public offering, and after the initial public offering, searching for a Business Combination target. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and investments held in Trust Account from the proceeds derived from the initial public offering and will recognize changes in the fair value of warrant liability and convertible promissory notes as other income (expense). The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Catcha Holdings LLC, a Cayman Islands limited liability company (the “Sponsor”).
Financing
The registration statement for the Company’s
Initial Public Offering (as defined below) was declared effective by the U.S. Securities and Exchange Commission (the “SEC”)
on February 11, 2021 (the “Effective Date”). On February 17, 2021, the Company consummated the initial public offering (the
“Initial Public Offering” or “IPO”) of
Simultaneously with the closing of the IPO,
the Company consummated the sale of an aggregate of
Following the closing of the IPO on February
17, 2021, an amount of $
6
Transaction costs amounted to $
On August 10, 2023, J.P. Morgan waived its entitlement to the payment of $
Initial Business Combination
The Company’s management has broad
discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the Private Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance
that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business
Combinations having an aggregate fair market value of at least
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of the initial Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.
The shareholders will be entitled to redeem
their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as
of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the
Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then outstanding public
shares. The amount in the Trust Account was initially $
If the Company is unable to complete a
Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $
In connection with the vote to approve
the Articles Amendment, holders of
On February 22, 2023, March 21, 2023, April
19, 2023, May 19, 2023, June 20, 2023 and July 20, 2023, the Company deposited
The Company will be required to make further
monthly deposits of $
The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s second amended and restated memorandum and articles of association, and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate the initial Business Combination within the Combination Period or during any Extension Period.
7
The Sponsor has agreed that it will be liable
to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting
firm) 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 (i) $
Business Combination Agreement
On August 3, 2023, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Crown LNG Holdings AS, a private limited liability company incorporated under the laws of Norway (“Crown”), Crown LNG Holdings Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (“PubCo”), and CGT Merge II Limited, a Cayman Islands exempted company limited by shares (“Merger Sub”).
Pursuant to the Business Combination Agreement,
subject to the satisfaction or waiver of certain conditions set forth therein, (i) Merger Sub will merge with and into the Company, with
the Company being the surviving company and becoming the wholly owned subsidiary of PubCo, as a result of which (a) each the Company Class
A Ordinary Share and each Class B Ordinary Share issued and outstanding immediately prior to the effective of the merger (the “Merger
Effective Time”) shall automatically be cancelled and cease to exist in exchange for the right to receive one newly issued share
of PubCo common stock, and (b) each the Company Warrant outstanding immediately prior to the Merger Effective Time shall cease to be a
warrant with respect to the Company Ordinary Shares and be assumed by PubCo and converted into a warrant to purchase one share of PubCo
common stock; and (ii) subject to the certain procedures and conditions, Crown shareholders will transfer their Crown stock to PubCo in
exchange for their Pro Rata Share (as defined below) of the Exchange Consideration, and the Exchange Consideration is a number of shares
of PubCo Common Stock issued by PubCo equal to (a) a transaction value of $
During
The Business Combination Agreement may be terminated under certain customary circumstances at any time prior to the Closing, including, without limitation, (i) upon the mutual written consent of the Company and Crown, (ii) by either the Company or Crown, if any of the conditions to the Closing has not been satisfied or waived by February 17, 2024, (iii) by the Company, on the one hand, or Crown, on the other hand, as a result of certain material breaches by the counterparties to the Business Combination Agreement that remain uncured after any applicable cure period, (iv) by either the Company or Crown, if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently prohibiting the transactions contemplated by the Business Combination Agreement, (v) by the Company, on the one hand, or Crown, on the other hand, as a result of the failure by the counterparties to obtain approvals required for the Business Combination, (vi) by the Company, if there has been a material adverse effect on each of the Crown and its direct and indirect subsidiaries and (vii) by the Company, if the Crown’s financials have not been delivered to the Company by September 15, 2023.
Going Concern
As of March 31, 2023, the Company had $
On February 14, 2023, the Company issued an unsecured
convertible promissory note (the “Extension Note”) to the Sponsor, pursuant to which the Company may borrow up to $
8
On March 9, 2023, the Company entered into a
subscription agreement (the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (the “Investor”
or “Polar”), pursuant to which, the Investor has agreed to provide $
In addition to the $
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Subtopic (“ASC”) 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that if the Company is unable to complete a Business Combination by February 17, 2024 or such earlier date as is determined by the Company’s board of directors, then the Company will cease all operations except for the purpose of liquidating. The mandatory liquidation, subsequent dissolution and the liquidity issues described above raise substantial doubt about the Company’s ability to continue as a going concern one year from the date that these condensed financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be unable to continue as a going concern.
Risks and Uncertainties
Management is currently evaluating the impact of the COVID-19 pandemic and Russia-Ukraine war and has concluded that while it is reasonably possible that the virus and war could have a negative effect on the Company’s financial position, results of its operations and/or closing a business combination, the specific impact is not readily determinable as of the date of the condensed financial statements. The accompanying unaudited condensed financial statements do not include any adjustments that might result from the outcome of these uncertainties.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been 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 period 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, 2022 as filed with the SEC on April 24, 2023, which the accompanying condensed balance sheet as of December 31, 2022 was derived from. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for any future periods.
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 on on-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 condensed 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.
9
Use of Estimates
The preparation of the condensed financial statements in conformity with US GAAP requires 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 condensed 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 condensed 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 short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $
Cash and investments held in Trust Account
In March 2023, the Company liquidated the money market funds held in the Trust Account. The funds in the Trust Account will be maintained in cash in an interest-bearing demand deposit account at a bank until the earlier of consummation of the initial Business Combination and liquidation. Prior to liquidating the money market funds, the Company’s portfolio of investments was comprised primarily of U.S. Treasury securities. The Company classifies its money market funds as trading securities in accordance with ASC Topic 320, “Investments-Debt and Equity Securities.” Trading securities are presented on the condensed 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 interest income from Trust Account in the accompanying unaudited condensed statements of operations.
As of March 31, 2023 and December 31, 2023, the
assets held in the Trust Account were $
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 $
Fair Value Measurements
FASB ASC Topic 820, “Fair Value Measurement” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three levels based on the inputs as follows:
| ● | Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. |
| ● | Level 2 - Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. |
| ● | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
10
The fair value of certain of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, approximates the carrying amounts represented in the condensed balance sheets. The fair values of prepaid expenses, accounts payable and accrued expenses, and due to related party are estimated to approximate the carrying values as of March 31, 2023 and December 31, 2022 due to the short maturities of such instruments.
Offering Costs Associated with IPO
The Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A-“Expenses of Offering”. Offering costs consist principally of underwriting fees, professional and registration fees that are related to the IPO.
FASB ASC 470-20, “Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance to allocate IPO proceeds from the Units between Class A ordinary shares and warrants, using the residual method by allocating IPO proceeds first to fair value of the warrants and then the Class A ordinary shares.
Offering costs in the aggregate of $
Over-allotment Option Liability
The Company accounted for the over-allotment option in accordance with the guidance contained in ASC 815-40. The over-allotment is not considered indexed to the Company’s own ordinary shares, and as such, it does not meet the criteria for equity treatment and is recorded as liabilities. On February 17, 2021, the underwriters exercised the over-allotment option partially and the remaining was expired on March 28, 2021. The fair value changes of over-allotment option liability between IPO closing date and the expiration date were recorded in operations during the year ended December 31, 2021.
Class A 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 FASB ASC Topic 480, “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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, Class A 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 the occurrence of uncertain future events. Accordingly, all ordinary shares subject to possible redemption is presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period.
In connection with the Extraordinary General Meeting
held on February 14, 2023, holders of
| Shares | Amount | |||||||
| Gross proceeds from initial public offering | $ | |||||||
| Less: Proceeds allocated to Public Warrants | - | ( | ) | |||||
| Less: Class A ordinary shares issuance costs | - | ( | ) | |||||
| Less: Initial fair value of over-allotment option | - | ( | ) | |||||
| Add: Remeasurement of Class A ordinary shares to redemption value | - | |||||||
| Add: Accretion of interest income to Class A shares subject to redemption | - | |||||||
| Class A ordinary shares subject to possible redemption as of December 31, 2022 | ||||||||
| Add: Accretion of interest income to Class A shares subject to redemption | - | |||||||
| Add: Accretion of extension deposit to Class A shares subject to redemption | - | |||||||
| Less: Class A shares redeemed, including interest | ( | ) | ( | ) | ||||
| Class A ordinary shares subject to possible redemption as of March 31, 2023 | $ | |||||||
11
Convertible Promissory Notes
The Company elected to account for the
Convertible Promissory Notes (which include the $
Capital Contribution Note
The Company elected to account for the
Capital Contribution Note entered into with Polar Multi-Strategy Master Fund (“Investor”) and Catcha Holdings LLC
(“Sponsor”) pursuant to the fair value option under ASC 825. ASC 825-10-15-4 provides for the “fair value
option” (“FVO”) election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial
instruments, wherein the financial instrument is initially measured at its issue-date estimated fair value and subsequently
remeasured at estimated fair value on a recurring basis at each reporting period date. Differences between the face value of the
Capital Contribution Note and fair value at issuance are recognized as either an expense in the statement of operations (if issued
at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the
Capital Contribution Note are recognized as non-cash gains or losses in the condensed statements of operations. The Company believes
that the fair value option better reflects the underlying economics of the Capital Contribution Note. The fair value of the Capital
Contribution Note will include both the fair value of the
Warrant Liability
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 grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements 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 sheets 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 Company accounts for the
warrants issued in connection with the IPO and the Private Placement 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. Accordingly, the Company classified each warrant as a liability at its fair value. This liability is subject to
re-measurement at each reporting periods. With each such re-measurement, the warrant liability will be adjusted to fair value, with
the change in fair value recognized in the Company’s statements of operations. As of March 31, 2023 and December 31, 2022,
there were
Net Income (Loss) Per Share
The Company has two classes of shares, which are
referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two
classes of shares. The
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| For the Three Months Ended March 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Basic and diluted net income per share: | ||||||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of net income (loss) | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
| Denominator: | ||||||||||||||||
| Weighted-average shares outstanding | ||||||||||||||||
| $ | ( | ) | $ | ( | ) | $ | $ | |||||||||
Income Taxes
The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the condensed financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the condensed financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. 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, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with federal income tax regulations, income taxes are not levied on the Company, but rather on the individual owners. United States (“U.S.”) taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive foreign investment company. Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time.
Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective January 1, 2024 for fiscal years beginning after December 15, 2023 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows. The Company has not adopted this guidance as of March 31, 2023.
The Company’s management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On February 17, 2021, the Company sold
13
Following the closing of the IPO on
February 17, 2021, an amount of $
Warrants
As of March 31, 2023, there
were
The warrants will become exercisable on the later of 12 months from the closing of the IPO or 30 days after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon
as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially
reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary
shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective
within 60 business days after the closing of the initial 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 Company’s Class A ordinary shares are 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 the Company will use its commercially reasonable 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
the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial 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 reasonable efforts to register or
qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the
exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained
by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair
market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B)
14
Redemption of warrants when the price
per Class A ordinary share equals or exceeds $
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if, and only if, the closing price of the Class A ordinary shares equals or exceeds $ |
Redemption of warrants when the price
per Class A ordinary share equals or exceeds $
Once the warrants become exercisable, the Company may redeem the outstanding warrants:
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | if, and only if, the closing price of the Company’s Class A ordinary shares equals or exceeds $ |
| ● | if the closing price of the Class A ordinary shares for any |
The warrant agreement contains an
Alternative Issuance provision that if less than
The Company believes that the adjustments to the exercise price of the warrants is based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815–40, and thus the warrants are not eligible for an exception from derivative accounting.
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability at fair value upon the closing of the IPO. The warrants were allocated a portion of the proceeds from the issuance of the Units equal to their fair value determined by the Monte Carlo simulation. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification. If no events occurred during the period, the warrants will not be reclassified. The fair value of the liabilities is re-measured at the end of every reporting period and the change in fair value is reported in the statements of operations as a gain or loss on derivative financial instruments.
15
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the IPO, the
Sponsor purchased an aggregate of
The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the IPO.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On December 28, 2020, the Sponsor paid
$
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares and any Class A ordinary shares issuable upon conversion thereof until the earlier to occur of: (i) one year after the completion of the initial Business Combination, or (ii) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property; except to certain permitted transferees and under certain circumstances (the “lock-up”).
Notwithstanding the foregoing, if the
closing price of Class A ordinary shares equals or exceeds $
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Due to related party
As of March 31, 2023 and December
31, 2022, the amount due to related party was $
Promissory Notes-Related Party
On December 28, 2020, the Company issued
an unsecured promissory note to the Sponsor, pursuant to which the Company was allocated to borrow up to $
On February 14, 2023, the Company issued an unsecured
convertible promissory note (the “Extension Note”, together with the “Working Capital Loans” as described below,
called “Convertible Promissory Notes”) to the Sponsor, pursuant to which the Company may borrow up to $
The Extension Note was valued using the fair value
method, with the changes of fair value at each reporting period recorded in the unaudited condensed statement of operations.
For the three months ended March 31, 2023, the
Company recorded $
Working Capital Loans
In addition, in order to finance transaction
costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s
officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”).
If the Company completes the initial Business Combination, the Company would repay the Working Capital Loans. In the event that the initial
Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the
Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. A portion of the Working
Capital Loans, not to exceed $
17
On December 13, 2022, the Company issued an
unsecured convertible promissory note under the Working Capital Loan to the Sponsor, pursuant to which the Company may borrow up to
$
For the three months ended March 31, 2023, the
Company recorded $
Administrative Service Fee
The Company has agreed, commencing
on the date the securities of the Company are first listed on NYSE, to pay the Sponsor $
Note 6. Capital Contribution Note
On March 9, 2023 the Company entered into a subscription agreement
(the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (the “Investor” or “Polar”),
pursuant to which, the Sponsor is seeking to raise $
The Company treated the Capital Contribution Note as a debt instrument
and measured it with fair value method, and records changes of fair value at each reporting period in the statement of operations. The fair value of the Capital Contribution Note will include both the fair value of the
For the three months ended March 31, 2023, the
Company recorded $
For the three months ended March 31, 2023, the Company recorded $
18
NOTE 7. FAIR VALUE MEASUREMENTS
The following tables presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| March 31, 2023 | Quoted Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Liabilities | ||||||||||||||||
| Warrant Liability - Public Warrants | $ | $ | $ | $ | ||||||||||||
| Warrant Liability - Private Warrants | ||||||||||||||||
| Working Capital Loan | ||||||||||||||||
| Promissory Note- Related Party | ||||||||||||||||
| Promissory Note- Third Party | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2022 | Quoted
Prices In Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||||||
| Assets | ||||||||||||||||
| Cash and investments held in Trust Account - Trading Securities | $ | $ | $ | $ | ||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Liabilities | ||||||||||||||||
| Warrant Liability - Public Warrants | $ | $ | $ | $ | ||||||||||||
| Warrant Liability - Private Warrants | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
The Warrants, Working Capital Loan, Extension Notes and Capital Contribution Note are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities, Working Capital Loan, Promissory Note-Related Party and Capital Contribution Note, respectively, in the accompanying condensed balance sheets. The warrant liabilities, Working Capital Loan, Promissory Note-Related Party and Capital Contribution Note are measured at fair value at inception and on a recurring basis, with changes in fair value presented in the unaudited condensed statements of operations. The excess of proceeds over fair value at issuance was recorded as additional paid-in capital in the accompanying unaudited condensed statements of shareholders’ equity. The excess of fair value over proceeds at issuance was recorded as expenses in the accompanying unaudited condensed statement of operations.
Warrant Liability
The Company’s public and private warrant liabilities were valued using a Monte Carlo simulation at issuance date utilizing management judgment and pricing inputs from the quoted underlying ordinary shares. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the public and private warrant liabilities was initially classified as level 3.
On November 4, 2022, the New York Stock Exchange (the “NYSE”) notified the Company, and publicly announced, that the NYSE determined to commence proceedings to delist the Company’s warrants, each whole warrant exercisable for one Class A ordinary share and listed to trade on NYSE under the symbol “CHAA WS”, from the NYSE and that trading in the Warrants would be suspended immediately, due to “abnormally low” trading price levels pursuant to Section 802.01D of the NYSE Listed Company Manual. The public warrants began to trade over-the counter (OTC) since then.
On March 23, 2023, the Company received approval to transfer the listing of Class A ordinary shares from the NYSE to the NYSE American and on March 28, 2023, the Class A ordinary shares began trading on the NYSE American under the symbol “CHAA”. In connection with the transfer, effective March 28, 2023, any remaining units were mandatorily separated into their component parts and the units are no longer traded on the NYSE.
The Company’s public warrants began trading under the ticker CHAAWS, on April 5, 2021. After this date, the public warrant values per share were based on the observed trading prices of the public warrants as of each balance sheet date. The fair value of the public warrant liability is classified as level 1 since April 5, 2021 and as of December 31, 2022. As of March 31, 2023, the fair value of the public warrant liability is re-classified as level 2 due to the insufficient trading volume.
As of March 31, 2023 and December 31, 2022, the private placement warrant were valued using a Monte Carlo model using the quoted underlying public warrants. Due to the observable inputs in the fair value estimation of the Private warrants, these inputs were classified as level 2 as of December 31, 2022 and March 31, 2023.
19
The key inputs used in the Monte Carlo simulation for the private warrants as of March 31, 2023 and December 31, 2022 were as follows:
| Input | March 31, 2023 | December 31, 2022 | ||||||
| Public Warrant Price | ||||||||
| Risk-free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
| Stock price | $ | $ | ||||||
| Exercise price | $ | $ | ||||||
| Likelihood of Completing a Business Combination | % | % | ||||||
Convertible Promissory Notes
Valuation of the convertible promissory notes (including the Extension Note and Working Capital Loan) was determined using a discounted cash flow analysis based on the estimated timing of the initial business combination and classified as a Level 3 valuation. The Key inputs for discounted cash flow analysis at initial draw dates and March 31, 2023 were as follows:
| Input | March 31, 2023 | Initial
Draw Dates (February 22, 2023 - March 21, 2023) | ||||||
| Risk-free interest rate for warrant | % | % | ||||||
| Risk-free interest rate for debt | % | % | ||||||
| Term of Debt Conversion | ||||||||
| Term of Warrant Conversion | ||||||||
| Expected volatility | % | % | ||||||
| Iterated/Market Stock price | $ | $ | ||||||
| Exercise price of Warrants | $ | $ | ||||||
| Strike Price of Debt Conversion | $ | $ | ||||||
| Likelihood of Completing a Business Combination | % | % | ||||||
Activity for the three months ended March 31, 2023 for the convertible promissory notes (including the Extension Note and Working Capital Loan) was as follows:
| Extension Note | Working Capital Loan | |||||||
| Proceeds from Convertible Promissory Notes | $ | $ | ||||||
| Excess of proceeds over fair value at issuance | ( | ) | ( | ) | ||||
| Change in fair value through March 31, 2023 | ||||||||
| Fair value as of March 31, 2023 | $ | $ | ||||||
Capital Contribution Note
Valuation of Capital Contribution Note was determined using a Probability Weighted Expected Return Method (“PWERM”) and classified as a Level 3 valuation. The PWERM is a multistep process in which value is estimated based on the probability -weighted present value of various future outcomes. The Key inputs for PWERM at at initial withdraw date and March 31, 2023 were as follows:
| Input | March 31, 2023 | Initial Draw | ||||||
| Risk-free interest | % | % | ||||||
| Estimated Term | ||||||||
| Expected volatility | % | % | ||||||
| Iterated/Market Stock price | $ | $ | ||||||
| Likelihood of Completing a Business Combination | % | % | ||||||
| Consideration for the Capital Call(s)- in shares | ||||||||
For the three months ended March 31, 2023, the activity in the Capital Contribution Note was as follows:
| Polar | ||||
| Proceeds from Capital Contribution Note | $ | |||
| Excess of fair value over proceeds at issuance | ||||
| Change in fair value through March 31, 2023 | ||||
| Fair value of the Capital Contribution Note as of March 31, 2023 | $ | |||
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NOTE 8. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of the Founder Shares, Class A shares that will be issued to Polar at Business Combination Closing, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans and Extension Note (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and Extension Note) will be entitled to registration rights pursuant to a registration and shareholder rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. However, the registration and shareholder rights agreement provide that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable Lock-up period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
The underwriters are entitled to a
deferred underwriting fee of
On August 10, 2023, J.P. Morgan waived its entitlement to the payment of $
Advisory Agreements
On March 14, 2023, the Company entered into an
agreement with Chardan Capital Markets, LLC (“Chardan”) with respect to an event of a stock exchange demand for action by
the Company (“Interim Listing Project”) at a time other than the initial closing of a business combination involving the Company
and a target or targets. The agreement calls for Chardan to receive a fee of $
On March 26, 2023, the Company entered an agreement with Alumia SARL
(“Alumnia”) to act as a non-exclusive transactional and strategic capital markets advisor to the Company assisting introductions
and with respect to the Company’s potential business combination. The agreement calls for Alumnia to receive simultaneously with
the closing of the Business Combination (a) a fee in the amount of $
On May 18, 2023, the Company engaged J.V.B.
Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“CCM”), to act as its (i) capital
markets advisor in connection with a possible business combination transaction with Crown LNG (the “Target”) (such
transaction, the “Sale Transaction”) and (ii) placement agent in connection with a private placement of equity, equity-linked, convertible and/or debt securities (the “Securities”) or other capital or debt raising transaction (the
“Offering”, and, together with the Sale Transaction, each a “Transaction” and collectively the
“Transactions”) in connection with the Sale Transaction. The Company shall pay CCM (i) an advisor fee in connection with
the Sale Transaction in an amount equal to the sum of (I) $
21
NOTE 9. SHAREHOLDERS’ DEFICIT
Preference shares
The Company is authorized to issue
Class A ordinary shares
The Company is authorized to
issue
Class B ordinary shares
The Company is authorized to issue
a total of
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s second amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The Class B ordinary shares will automatically
convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have redemption rights or
be entitled to liquidating distributions from the Trust Account if the Company does not consummate an initial Business Combination) at
the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class
A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on an as-converted basis,
22
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the condensed balance sheet date up to the date that the condensed financial statements were issued. Other than described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.
Debt Financing for Extension Funds and Working Capital
Subsequent to the condensed balance sheet date up to the date that
the condensed financial statements were issued, the Company received $
On April 19, 2023, May 19, 2023, June 20, 2023 and July 20, 2023, the
Company deposited four additional tranches of $
On May 24, 2023, the Company received the remaining $
Business Combination Agreement
On May 18, 2023, the Company engaged CCM, to act as its capital markets advisor and placement agent in connection with a possible business combination transaction with Crown as discussed in Note 1, Business Combination Agreement.
Waiver of Deferred Underwriting Fees
On August 10, 2023, J.P. Morgan waived its entitlement to the payment of $
23
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. GAAP. We describe our significant accounting policies in Note 2—Significant Accounting Policies, of the Notes to Condensed Financial Statements included in this report. The preparation of these unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Catcha Investment Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Catcha Holdings LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “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. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s 10-K report for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 24, 2023. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on December 17, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds (net of any redemptions as discussed under Liquidity and Going Concern section below) of this offering and the sale of the private placement warrants, our shares, debt or a combination of cash, equity and debt.
We expect to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Business Combination Agreement
On August 3, 2023, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Crown LNG Holdings AS, a private limited liability company incorporated under the laws of Norway (“Crown”), Crown LNG Holdings Limited, a private limited company incorporated under the laws of Jersey, Channel Islands (“PubCo”), and CGT Merge II Limited, a Cayman Islands exempted company limited by shares (“Merger Sub”).
Pursuant to the Business Combination Agreement, subject to the satisfaction or waiver of certain conditions set forth therein, (i) Merger Sub will merge with and into the Company, with the Company being the surviving company and becoming the wholly owned subsidiary of PubCo, as a result of which (a) each the Company Class A Ordinary Share and each Class B Ordinary Share issued and outstanding immediately prior to the the effective of the merger (the “Merger Effective Time”) shall automatically be cancelled and cease to exist in exchange for the right to receive one newly issued share of PubCo common stock, and (b) each the Company Warrant outstanding immediately prior to the Merger Effective Time shall cease to be a warrant with respect to the Company Ordinary Shares and be assumed by PubCo and converted into a warrant to purchase one share of PubCo common stock; and (ii) subject to the certain procedures and conditions, Crown shareholders will transfer their Crown stock to PubCo in exchange for their Pro Rata Share (as defined below) of the Exchange Consideration, and the Exchange Consideration is a number of shares of PubCo Common Stock issued by PubCo equal to (a) a transaction value of $600 million (the “Transaction Value”) divided by (b) a per share price of $10.00. Pro Rata Share means with respect to each Crown shareholder, a fraction expressed as a percentage equal to (i) the number of shares of Crown stock held by such Crown shareholder immediately prior to the effective of the exchange (the “Exchange Effective Time”), divided by (ii) the total number of issued and outstanding shares of Company Stock immediately prior to the Exchange Effective Time.
During the seven years following the consumption of the Business Combination (the “Closing”), the persons who are Crown shareholders immediately prior to the Exchange Effective Time and who have participated in the Exchange (the “Exchanging Shareholders”) shall have the contingent right to receive in the aggregate a number of shares of PubCo Common Stock equivalent to 10% of the issued and outstanding PubCo Common Stock as of the Closing, which will vest upon achievement of certain share prices and milestones as provided under the Business Combination Agreement.
24
The Business Combination Agreement may be terminated under certain customary circumstances at any time prior to the Closing, including, without limitation, (i) upon the mutual written consent of the Company and Crown, (ii) by either the Company or Crown, if any of the conditions to the Closing has not been satisfied or waived by February 17, 2024, (iii) by the Company, on the one hand, or Crown, on the other hand, as a result of certain material breaches by the counterparties to the Business Combination Agreement that remain uncured after any applicable cure period, (iv) by either the Company or Crown, if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently prohibiting the transactions contemplated by the Business Combination Agreement, (v) by the Company, on the one hand, or Crown, on the other hand, as a result of the failure by the counterparties to obtain approvals required for the Business Combination, (vi) by the Company, if there has been a material adverse effect on each of the Crown and its direct and indirect subsidiaries and (vii) by the Company, if the Crown’s financials have not been delivered to the Company by September 15, 2023.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to March 31, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and after the Initial Public Offering, identifying a target company for a business combination and negotiating for the business combination. We do not expect to generate any operating revenues until after the completion of our business combination. We may generate non-operating income in the form of interest income on cash and investments held in the Trust Account and will recognize changes in the fair value of warrant liability and convertible promissory notes as other income (expense). We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a business combination.
For the three months ended March 31, 2023, we had a net loss of $188,331, which consisted of operating expenses of $909,935, unrealized loss on excess of fair value of Capital Contribution Note over proceeds at issuance of $1,104,618, unrealized loss on change in fair value of convertible promissory notes of $901, unrealized loss on change in fair value of Capital Contribution Note of $4,130 and unrealized loss on change in fair value of the warrant liability of $112,509, partially offset by interest income on cash and investments held in the Trust Account of $1,943,762.
For the three months ended March 31, 2022, we had a net income of $4,715,750, which consisted of an unrealized gain on change in fair value of the warrant liability of $5,069,115, interest income on cash and investments held in the Trust Account of $37,518, offset partially by formation and operating expenses of $390,883.
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Liquidity and Going Concern
On February 17, 2021, we consummated the Initial Public Offering of 30,000,000 Units, which included the partial exercise by the underwriters of the over-allotment option to purchase an additional 2,500,000 Units, at $10.00 per Unit, generating gross proceeds of $300,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of an aggregate of 5,333,333 Private Placement Warrants to our sponsor at a price of $1.50 per warrant, generating gross proceeds of $8,000,000.
Following the Initial Public Offering, the partial exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $300,000,000 was placed in the Trust Account. We incurred $17,031,183 in transaction costs, including $6,000,000 of underwriting fees, $10,500,000 of deferred underwriting fees and $531,183 of other offering costs in connection with the Initial Public Offering and the sale of the Private Placement Warrants.
On August 10, 2023, J.P. Morgan waived its entitlement to the payment of $10,500,000 deferred underwriting fees in connection with its role as underwriter in the Company’s IPO. Furthermore, J.P. Morgan had no role in connection with the business combination transaction.
For the three months ended March 31, 2023, net cash used in operating activities was $383,673. The net loss of $188,331 was impacted by unrealized loss on change in fair value of the warrant liability of $112,509, unrealized loss on excess of fair value of Capital Contribution Note over proceeds at issuance of $1,104,618, unrealized loss on change in fair value of the Capital Contribution Note of $4,130, unrealized loss on change in fair value of the convertible promissory notes of $901, interest income on cash and investments held in the Trust Account of $1,943,762 and by changes in operating assets and liabilities, which provided by $526,262 of cash in operating activities, primarily due to the increase in accounts payable and accrued expenses.
For the three months ended March 31, 2022, net cash used in operating activities was $321,195. The net income of $4,715,750 was impacted by unrealized gain on fair value changes of the warrant liability of $5,069,115, interest earned on cash and investments held in Trust Account of $37,518 and by changes in operating assets and liabilities, which provided $69,688 of cash from operating activities.
For the three months ended March 31, 2023, net cash provided by investing activities was $282,753,643, consisting of disposal of cash and investments held in Trust Account of 282,903,643, partially offset by cash deposited in Trust Account of $150,000.
For the three months ended March 31, 2022, net cash provided by/used in investing activities was $0.
For the three months ended March 31, 2023, net cash used in financing activities was $282,275,079, consisting of redemption of Class A ordinary shares $282,903,643, partially offset by proceeds from issuance of Working Capital Loan $278,564, proceeds from issuance of promissory note to related party of $150,000 and proceeds from issuance of Capital Contribution Note of $200,000.
For the three months ended March 31, 2022, net cash provided by/used in financing activities was $0.
At March 31, 2023, we had cash in the Trust Account of $23,276,408. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable (if applicable) and deferred underwriting commissions) to complete our business combination. To the extent that our shares or debt is used, in whole or in part, as consideration to complete our business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the post-business combination entity, make other acquisitions and pursue our growth strategies. On February 14, 2023, we held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), where the shareholders approved a proposal (the “Trust Amendment Proposal”) to amend our investment management trust agreement, dated as of February 11, 2021 (the “IMTA”), by and between us and Continental Stock Transfer (“CST”), to extend the date by which the we have to consummate a business combination from February 17, 2023 to February 17, 2024 or such earlier date as is determined by our board of directors (such date, the “Extended Date”). In connection with the vote, the holders of 27,785,141 Class A ordinary shares of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.18 per share, for an aggregate redemption amount of $282,903,643. The Company will be required to make further monthly deposits of $75,000 to extend this date for each month up through February 17, 2024. The Company is under no further obligation to make any additional deposits.
As of March 31, 2023, we had $115,597 in cash outside of the Trust Account and working capital deficit of $2,576,445. In addition, in order to finance transaction costs in connection with a business combination, our sponsor, or an affiliate of our sponsor, or certain of our officers and directors may, but are not obligated to, provide us with working capital loans. On December 13, 2022, we issued an unsecured convertible promissory note (see Note 5 to the Condensed Financial Statements) to the Sponsor, pursuant to which we may borrow up to $1,500,000 (the “$1.5 Million Convertible Promissory Note”) from the Sponsor. As of March 31, 2023, we had borrowed $278,564 under such loan. Up to the date that the condensed financial statements were issued, the Company received a total of $578,564 for working capital purposes under the $1.5 Million Convertible Promissory Note.
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On February 14, 2023, the Company issued an unsecured convertible promissory note (the “Extension Note”) to the Sponsor, pursuant to which the Company may borrow up to $900,000 (the “Extension Loan”) from the Sponsor. Pursuant to the Extension Note, from February 17, 2023 to February 17, 2024 or such earlier date as is determined by the Company’s board of directors (such date, the “Extended Date”), the Sponsor has agreed to deposit into the Company’s Trust Account established in connection with its IPO the lesser of (i) $75,000 or (ii) $0.0375 for each unredeemed public share, for each month (or a pro rata portion thereof if less than a month) until the earlier of (i) the date of the extraordinary general meeting held in connection with a shareholder vote to approve an initial Business Combination, and (ii) the date that $900,000 has been loaned. As of March 31, 2023, we had borrowed $150,000 under the Extension Note. Up to the date that the condensed financial statements were issued, the Company had received $450,000 under the Extension Loan. Using these loans received, the company had deposited six tranches of $75,000 into Trust Account on February 22, 2023 and March 21, 2023, April 19, 2023, May 19, 2023, June 20, 2023 and July 20, 2023, to extend the date that the Company has to consummate a business combination from February 17, 2023 to August 17, 2023. The Company has 3 business days after August 17, 2023 to deposit another $75,000 to the Trust Account, to extend the date that the Company has to consummate a business combination to September 17, 2023. The Company will make such deposit shortly after the condensed financial statements are issued. The Company will be required to make further monthly deposits of $75,000 to extend this date for each month up through February 17, 2024. The Company is under no further obligation to make any additional deposits.
On March 9, 2023 the Company entered into a subscription agreement (the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (the “Investor”), pursuant to which, the Sponsor is seeking to raise $1,200,000 to fund the Extension and to provide working capital to the Company. The Sponsor has committed to fund $900,000 of this amount through the Extension Note described above and the Investor has agreed to provide the remaining $300,000 (the “Capital Contribution Note”). The the Company will request funds from the Sponsor for working capital purposes (“Drawdown Request”). Upon on at least five (5) calendar days’ prior written notice (“Capital Notice”) , the Sponsor may require a drawdown against the capital commitment in order to meet 25% of the Sponsor’s commitment to the Company under a Drawdown Request (“Capital Call”). In consideration of the Capital Call(s) made hereunder, the Company will issue 300,000 shares of Class A Common Stock to the Investor at the closing of a Business Combination. Any amounts funded by the Sponsor to the Company under a Drawdown Request shall not accrue interest and shall be promptly repaid by the the Company to the Sponsor upon the Business Combination Closing. Following receipt of such sums from the Company, and in any event within 5 business days of the Business Combination Closing, the Sponsor or the Company shall pay to the Investor, an amount equal to all under the Subscription Agreement (the “Business Combination Payment”). The Company and Sponsor are jointly and severally obligated to make the Business Combination Payment to the Investor. The Investor may elect at the Business Combination Closing to receive such Business Combination Payment in cash or shares of Class A Common Stock at a rate of one share of Class A Common Stock for each $10 of the Capital Calls funded under this agreement. If the Company liquidates without consummating a Business Combination, any amounts remaining in the Sponsor or the Company’s cash accounts after paying any outstanding third party invoices (excluding any due to the Sponsor), not including the Company’s Trust Account, will be paid to the Investor within five (5) days of the liquidation. As of March 31, 2023, we received $200,000 under the Subscription Agreement. On May 24, 2023, the Company received the remaining $100,000 from Polar. Up to the date that the condensed financial statements were issued, the Company has received $300,000 in funding under the Subscription Agreement.
In addition to the $1,500,000 Convertible Promissory Note, in order to fund working capital deficiencies or finance transaction costs in connection with a business combination, our sponsor, or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required. Management will use these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating a Business Combination No additional funding has been received under this arrangement. However, management expects the Company to continue to incur significant costs in pursuit of the consummation of a Business Combination and current funds, committed or otherwise, may not be sufficient to operate the Company for at least the 12 months following the issuance of the condensed financial statements contained herein. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business Combination.
In connection with our assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Subtopic (“ASC”) 205-40, “Presentation of Financial Statements – Going Concern,” management has determined that if we are unable to complete a Business Combination by February 17, 2024 or such earlier date as is determined by the Company’s board of directors, then we will cease all operations except for the purpose of liquidating. The mandatory liquidation, subsequent dissolution and liquidity issues raise substantial doubt about our ability to continue as a going concern one year from the date that these condensed financial statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be unable to continue as a going concern.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2023. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.
We have an agreement to pay the sponsor $10,000 per month for office space, utilities, secretarial and administrative support services provided to members of the Company’s management team. We began incurring these fees on February 12, 2021 and will continue to incur these fees monthly until the earlier of the completion of the business combination or our liquidation. We incurred $30,000 in expenses in connection with such services for both the three months ended March 31, 2023 and 2022, as reflected in the accompanying unaudited condensed statements of operations. As of March 31, 2023 and December 31, 2022, the amount due to related party in connection with such expenses was $155,625 and $125,625 respectively.
We had an agreement to pay the underwriters a deferred fee of $10,500,000 in the aggregate, which will become payable to them 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. On August 10, 2023, J.P. Morgan waived its entitlement to the payment of $10,500,000 deferred underwriting fees in connection with its role as underwriter in our IPO. Furthermore, J.P. Morgan had no role in connection with the business combination transaction.
On March 14, 2023, the Company entered into an agreement with Chardan Capital Markets, LLC (“Chardan”) with respect to an event of a stock exchange demand for action by the Company (“Interim Listing Project”) at a time other than the initial closing of a business combination involving the Company and a target or targets. The agreement calls for Chardan to receive a fee of $175,000 at the signing of the agreement , a fee of $175,000 no later than 10 calendar days after Chardan informs the Company of the documented completion of the technical advisory activities and a deferred fee of $275,000 at the earlier of (i) the closing of the Transaction from the closing flow-of-funds or (ii) upon the liquidation of the trust account if the Company has not consummated a business combination. For the three months ended March 31, 2023, the Company recorded all of the $625,000 such advisory service fee in the accompanying unaudited condensed statement of operations. As of March 31, 2023, the Company has paid $175,000 to Chardan and the total unpaid amounts to Chardan was $450,000. Up to the date that the condensed financial statements were issued, the Company has paid $350,000 to Chardan and the total unpaid amounts to Chardan was $275,000.
On March 26, 2023, the Company entered an agreement with Alumia SARL (“Alumnia”) to act as a non-exclusive transactional and strategic capital markets advisor to the Company assisting introductions and with respect to the Company’s potential business combination. The agreement calls for Alumnia to receive simultaneously with the closing of the Business Combination (a) a fee in the amount of $2,500,000 and (b) a fee of 4% multiplied by the dollar amount of the PIPE provided by third party investors identified and introduced by Alumnia, regardless of whether the counterparty in the applicable business combination was a subject target, payable upon the closing. Alumia is currently not involved in the Company’s Business Combination transaction with Crown, and no fee is currently payable under this agreement.
On May 18, 2023, the Company engaged J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“CCM”), to act as its (i) capital markets advisor in connection with a possible business combination transaction with Crown LNG (the “Target”) (such transaction, the “Sale Transaction”) and (ii) placement agent in connection with a private placement of equity, equity-linked, convertible and/or debt securities (the “Securities”) or other capital or debt raising transaction (the “Offering”, and, together with the Sale Transaction, each a “Transaction” and collectively the “Transactions”) in connection with the Sale Transaction. The Company shall pay CCM (i) an advisor fee in connection with the Sale Transaction in an amount equal to the sum of (I) $2,000,000 paid in full in U.S. dollars simultaneously with the closing of the Sale Transaction and (II) 50,000 shares of common stock or equivalent equity (the “Shares”) of the publicly listed post-business combination company (collectively, the “Advisor Fee”) and (ii) a transaction fee in connection with the Offering of an amount equal to 7.0% of the sum of (A) the gross proceeds raised from investors and received by the Company or Crown simultaneously with or before the closing of the Offering plus (B) proceeds released from the Trust Account with respect to any shareholder of the Company that (x) entered into a non-redemption or other similar agreement or (y) did not redeem the Company’s Class A ordinary shares, in each instance to the extent such investor or shareholder under (A) and (B) above was identified to the Company by CCM (the “Offering Fee” and together with the Advisor Fee, the “Transaction Fee”), which shall be payable in U.S. dollars by the Company and due to CCM simultaneously with the closing of the Offering. The Shares shall be fully duly authorized, validly issued, paid and non-assessable and shall be registered for resale under the Act, or otherwise freely tradeable, as of the closing of the Sale Transaction and will be delivered in book entry form in the name of and delivered to CCM (or its designee) at the closing of the Sale Transaction.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with U.S. GAAP. We describe our significant accounting policies in Note 2—Significant Accounting Policies, of the Notes to Condensed Financial Statements included in this report. The preparation of these condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Other than described below, there are no changes to policies described in the Form 10-K for the year ended December 31, 2022 filed with the SEC on April 24, 2023.
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Convertible Promissory Notes
The Company elected to account for the Convertible Promissory Notes entered into with Catcha Holdings LLC (“Sponsor”) pursuant to the fair value option under ASC 825. ASC 825-10-15-4 provides for the “fair value option” (“FVO”) election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Differences between the face value of the convertible promissory note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the convertible promissory note are recognized as non-cash gains or losses in the condensed statements of operations. The Company believes that the fair value option better reflects the underlying economics of the Convertible Promissory Notes. As such, the Convertible Promissory Notes, were initially measured at $164,938 as of the issue date (including $107,128 under $1.5 Million Convertible Promissory Note and $57,810 under the Extension Note ). The $263,626 excess of proceeds over fair value at issuance was recorded as additional paid-in capital in the accompanying unaudited condensed statement of shareholders’ (deficit) for the three months ended March 31, 2023. As of March 31, 2023, the fair value of the Convertible Promissory Notes was $165,839 (including $107,795 under $1.5 Million Convertible Promissory Note and $58,044 under the Extension Note). For the three months ended March 31, 2023, the Company recognized $901 unrealized loss on fair value changes of the Convertible Promissory Notes, in the unaudited condensed statements of operations.
Capital Contribution Note
The Company elected to account for the Capital Contribution Note entered into with Polar Multi-Strategy Master Fund (“Investor”) and Catcha Holdings LLC (“Sponsor”) pursuant to the fair value option under ASC 825. ASC 825-10-15-4 provides for the “fair value option” (“FVO”) election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. Differences between the face value of the Capital Contribution note and fair value at issuance are recognized as either an expense in the statement of operations (if issued at a premium) or as a capital contribution (if issued at a discount). Any material changes in the estimated fair value of the Capital Contribution note are recognized as noncash gains or losses in the condensed statements of operations. The Company believes that the fair value option better reflects the underlying economics of the Capital Contribution Note. The fair value of the Capital Contribution Note will include both the fair value of the 300,000 shares in consideration for the Capital Calls as defined in Note 6 and the principal as of each reporting date. As such, the Capital Contribution Note, was initially measured at $1,304,618 as of the issue date. The $1,104,618 excess of fair value of Capital Contribution Note over proceeds at issuance was recorded in the accompanying unaudited condensed statement of operations for the three months ended March 31, 2023. As of March 31, 2023, the fair value of the Capital Contribution Note was $1,308,748. For the three months ended March 31, 2023, the Company recognized $4,130 unrealized loss on fair value changes of the Capital Contribution Note, in the unaudited condensed statements of operations.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a Smaller Reporting Company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 31, 2023, due to the material weakness in our internal control over financial reporting related to accounting for complex financial instruments and determining the fair value of complex financial instruments. In light of this material weakness, we performed additional analysis as deemed necessary to ensure that our unaudited condensed financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the condensed 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 for the periods presented.
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.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2023, covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The Company has made changes in its internal control over financial reporting to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our condensed financial statements, including providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The Company can offer no assurance that these changes will ultimately have the intended effects.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
As the Company qualifies as a Smaller Reporting Company under Item 10(f) of Regulation S-K, risk factors are not required to be included in a quarterly report and such are omitted from this filing.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| CATCHA INVESTMENT CORP | ||
| Date: August 18, 2023 | /s/ Patrick Grove | |
| Name: | Patrick Grove | |
| Title: | Chairman and Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: August 18, 2023 | /s/ Luke Elliott | |
| Name: | Luke Elliott | |
| Title: | Director and President | |
| (Principal Financial and Accounting Officer) | ||
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Exhibit 31.1
CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Patrick Grove, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Catcha Investment Corp; |
| 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 period presented in this report; |
| 4. | The registrant’s other certifying officers 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)) 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 our 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 our 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; and |
| 5. | The registrant’s other certifying officers 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 controls over financial reporting. |
Date: August 18, 2023
| By: | /s/ Patrick Grove | ||
| Name: | Patrick Grove | ||
| Title: | Chairman and Chief Executive Officer | ||
| (Principal Executive Officer) | |||
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Luke Elliott, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Catcha Investment Corp; |
| 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 period presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) 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 our 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 our 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; and |
| 5. | The registrant’s other certifying officers 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 controls over financial reporting. |
Date: August 18, 2023
| By: | /s/ Luke Elliott | ||
| Name: | Luke Elliott | ||
| Title: | Director & President | ||
| (Principal Financial and Accounting Officer) | |||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of Catcha Investment Corp (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Patrick Grove, Director and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 18, 2023
| By: | /s/ Patrick Grove | ||
| Name: | Patrick Grove | ||
| Title: | Director and Chief Executive Officer | ||
| (Principal Executive Officer) | |||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of Catcha Investment Corp (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Luke Elliott, Director and President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 18, 2023
| By: | /s/ Luke Elliott | ||
| Name: | Luke Elliott | ||
| Title: | Director and President | ||
| (Principal Financial and Accounting Officer) | |||