Restatement of Previously Issued Financial Statements

9 Months Ended

Sep. 30, 2023

Restatement of Previously Issued Financial Statements

Restatement of Previously Issued Financial Statements

Note 2—Restatement of Previously Issued Financial Statements

In connection with the preparation of the financial statements of the Company as of and for the year ended 

December 31, 2023, the Company determined that there were errors related to the following as of and for the three and nine month periods ended September 30, 2023:

1.	There was an extinguishment of debt with the Prior Sponsor which occurred on June 30, 2023, who is a related party, and the Company incorrectly recorded the extinguishment of debt in the condensed statement of operations instead of as a capital contribution as required by ASC 470-50-40-2. The Company has adjusted the Prior Sponsor’s forgiveness of the service administrative fee (see Note 6) totaling $204,516, from other income in the condensed statement of operations to additional paid in capital in the condensed statement of shareholders’ deficit as of September 30, 2023. The Company has also restated Note 6 in the amended and restated financial statements.
2.	The Company incorrectly recorded a change in fair value of the Prior Sponsor Working Capital Loan in the condensed statement of operations as previously reported for the period ended September 30, 2023. The Company in accordance with ASC 815-15-25 and 470-50-40-2 should have recorded the change in face value vs. fair value for the Prior Sponsor Working Capital Loan (see Note 6), as a capital contribution since it was issued at a discount and the debt was with a related party. Additionally, management of the Company re-evaluated certain assumptions related to the fair value of the Prior Sponsor Working Capital Loan, at the date of forgiveness, September 6, 2023. The assumptions that changed were related to the probability of a successful Business Combination and the timing of when a successful Business Combination would be complete. The assumption that was changed related to the probability of a successful Business Combination at September 6, 2023 was because management of the Company was only in preliminary discussions with potential target companies to consummate a Business Combination, therefore the probability of the consummation of a Business Combination was less than probable and the probability was lowered from the initial assumption. Additionally, because of the preliminary stages the Company was in regarding a potential Business Combination at September 6, 2023, management of the Company changed the assumption of when the consummation of a Business Combination would be complete to the third quarter of 2024 instead of the original assumption of the second quarter of 2024. The adjustments resulted in a decrease in net income in the condensed statement operations for the three and nine month periods ended September 30, 2023 and increase in additional paid-in capital totaling $68,214 as of September 30, 2023. The Company has also restated the disclosures in Notes 3, 6 and 10 in the amended and restated financial statements.
3.	The Company did not assess the Founder Shares granted to former directors correctly in accordance with ASC 817, “Compensation – Stock Compensation” as of July 18, 2023. The error resulted in the Company failing to record a shared based compensation expense totaling $35,535. The adjustment to correct the error resulted in a decrease in net income for the three and nine month periods ended September 30, 2023 and increase in additional paid-in capital as of September 30, 2023 compared to the Original Filing of the 10-Q. Notes 6 and 11 of the condensed financial statements were also restated in these financial statements.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company determined that the errors were material to its previously issued financial statements. Therefore, the Company concluded that the previously issued financial statements should be restated.

The following tables summarize the effect of the restatement on each financial statement line items as of the dates, and for the period, indicated:

Balance sheet as of September 30, 2023
	As previously reported			Adjustments			As restated
Additional paid-in capital	$	10,122,385		$	308,265		$	10,430,650
Accumulated deficit	$	(12,331,009	)	$	(308,265	)		(12,639,274	)

Statement of Operations for the three months ended  September 30, 2023
	As previously reported			Adjustments			As restated
General and administrative expenses and loss from operations	$	(779,622	)	$	(35,535	)	$	(815,157	)
Total other income	$	1,250,772		$	(68,214	)	$	1,182,558
Total net income	$	471,150		$	(103,749	)	$	367,401
Basic and diluted net income per share, Class A ordinary shares subject to redemption	$	0.03		$	(0.01	)	$	0.02
Basic and diluted net income per share, Class B ordinary shares	$	0.03		$	(0.01	)	$	0.02

Statement of Operations for the nine months ended  September 30, 2023
	As previously reported			Adjustments			As restated
General and administrative expenses and loss from operations	$	(1,597,321	)	$	(35,535	)	$	(1,632,856	)
Total other income	$	7,469,119		$	(272,730	)	$	7,196,389
Total net income	$	5,871,798		$	(308,265	)	$	5,563,533
Basic and diluted net income per share, Class A ordinary shares subject to redemption	$	0.23		$	(0.01	)	$	0.22
Basic and diluted net income per share, Class B ordinary shares	$	0.23		$	(0.01	)	$	0.22