UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark
One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to .
Commission File Number 001-41321
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP.
(Exact name of registrant as specified in its charter)
Cayman Islands | | N/A |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
60
Nexus Way, 4th Floor,
Camana Bay, PO Box 757, Grand
Cayman, KY1-9006
(Address
of principal executive offices)
+1 345 640 4900
Registrant’s
Telephone Number, Including Area Code
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | | Trading Symbol(s) | | Name of Each Exchange on Which Registered |
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant | | PLAOU | | The Nasdaq Stock Market LLC |
Class A ordinary shares, included as part of the units | | PLAO | | The Nasdaq Stock Market LLC |
Redeemable warrants, included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 | | PLAOW | | The Nasdaq Stock Market LLC |
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 for
such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒
No ☐
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 the 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 ☐ |
| Non-accelerated filer ☒ | | Smaller reporting company ☒ |
| | | Emerging growth company ☒ |
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☒
No ☐
As of August 14, 2024, there were 4,541,424 Class A ordinary shares,
par value $0.0001 per share and 5,750,000 Class B ordinary shares, par value $0.0001 per share, issued and outstanding, respectively.
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP.
table
of contents
PART I –
FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
PATRIA LATIN AMERICAN
OPPORTUNITY ACQUISITION CORP
CONDENSED BALANCE SHEETS
| |
JUNE 30,
2024 | | |
DECEMBER 31,
2023 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | |
| |
Cash | |
$ | 23,674 | | |
$ | 47,046 | |
Prepaid expenses | |
| 185,744 | | |
| 50,967 | |
Marketable securities held in Trust Account | |
| 52,313,018 | | |
| 187,355,645 | |
Total current assets | |
| 52,522,436 | | |
| 187,453,658 | |
Total Assets | |
$ | 52,522,436 | | |
$ | 187,453,658 | |
| |
| | | |
| | |
LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION, AND SHAREHOLDERS’ DEFICIT | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 181,221 | | |
$ | 241,365 | |
Due to related party | |
| 3,600,000 | | |
| 2,100,000 | |
Promissory note - related party | |
| 563,916 | | |
| - | |
Accrued expenses | |
| 266,471 | | |
| 74,757 | |
Deferred underwriting fees payable | |
| 4,025,000 | | |
| 4,025,000 | |
Derivative warrant liabilities | |
| 1,424,800 | | |
| 780,000 | |
Total current liabilities | |
| 10,061,408 | | |
| 7,221,122 | |
Total liabilities | |
| 10,061,408 | | |
| 7,221,122 | |
| |
| | | |
| | |
Commitments and Contingencies (Note 6) | |
| | | |
| | |
| |
| | | |
| | |
Class A ordinary shares subject to possible redemption, $0.0001 par value; 4,541,424 and 16,880,481 shares at $11.52 and $11.10 per share at June 30, 2024 and December 31, 2023, respectively | |
| 52,313,018 | | |
| 187,355,645 | |
| |
| | | |
| | |
Shareholders’ deficit | |
| | | |
| | |
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | |
| - | | |
| - | |
Class A ordinary shares, $0.0001 par value; 200,000,000 shares authorized; none issued or outstanding (excluding 4,541,424 and 16,880,481 shares subject to possible redemption at June 30, 2024 and December 31, 2023, respectively) | |
| - | | |
| - | |
Class B ordinary shares, $0.0001 par value; 20,000,000 shares authorized; 5,750,000 shares issued and outstanding | |
| 575 | | |
| 575 | |
Additional paid-in capital | |
| 60,000 | | |
| - | |
Accumulated deficit | |
| (9,912,565 | ) | |
| (7,123,684 | ) |
Total shareholders’ deficit | |
| (9,851,990 | ) | |
| (7,123,109 | ) |
Total Liabilities, Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit | |
$ | 52,522,436 | | |
$ | 187,453,658 | |
The accompanying notes are an integral part of these
unaudited condensed financial statements.
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| |
For The
Three Months Ended
June 30,
2024 | | |
For The
Three Months Ended
June 30,
2023 | | |
For The
Six Months Ended
June 30,
2024 | | |
For The
Six Months Ended
June 30,
2023 | |
| |
| | |
| | |
| | |
| |
General and administrative expenses | |
$ | 334,496 | | |
$ | 407,651 | | |
$ | 570,165 | | |
$ | 687,488 | |
Loss from operations | |
| (334,496 | ) | |
| (407,651 | ) | |
| (570,165 | ) | |
| (687,488 | ) |
Change in fair value of derivative warrant liabilities | |
| 135,200 | | |
| 1,144,000 | | |
| (644,800 | ) | |
| 1,133,600 | |
Realized gain on investments held in Trust Account | |
| 2,254,058 | | |
| 2,671,830 | | |
| 4,690,197 | | |
| 5,241,005 | |
Interest on related party promissory note | |
| (5,795 | ) | |
| - | | |
| (5,795 | ) | |
| - | |
Net income | |
$ | 2,048,967 | | |
$ | 3,408,179 | | |
$ | 3,469,437 | | |
$ | 5,687,117 | |
Weighted average shares outstanding of Class A ordinary shares subject to possible redemption, basic and diluted | |
| 14,575,382 | | |
| 21,722,298 | | |
| 15,727,932 | | |
| 22,357,620 | |
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption | |
$ | 0.16 | | |
$ | 0.15 | | |
$ | 0.27 | | |
$ | 0.25 | |
Weighted average shares outstanding of Class B non-redeemable ordinary shares, basic and diluted | |
| 5,750,000 | | |
| 5,750,000 | | |
| 5,750,000 | | |
| 5,750,000 | |
Basic and diluted net (loss) income per share, Class B non-redeemable ordinary shares | |
$ | (0.04 | ) | |
$ | 0.02 | | |
$ | (0.13 | ) | |
$ | 0.01 | |
The accompanying notes are an integral part of these
unaudited condensed financial statements.
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP
CONDENSED STATEMENTS OF CHANGES IN ORDINARY SHARES SUBJECT TO POSSIBLE
REDEMPTION AND SHAREHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024
(Unaudited)
| |
Ordinary Shares
Subject to Possible
Redemption | | |
Ordinary Shares | | |
Additional | | |
| | |
Total | |
| |
Class A | | |
Class B | | |
Paid-In | | |
Accumulated | | |
Shareholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as of January 1, 2024 | |
| 16,880,481 | | |
$ | 187,355,645 | | |
| 5,750,000 | | |
| 575 | | |
$ | - | | |
$ | (7,123,684 | ) | |
$ | (7,123,109 | ) |
Deemed contribution for administrative support - related party | |
| - | | |
| - | | |
| - | | |
| - | | |
| 30,000 | | |
| - | | |
| 30,000 | |
Accretion of Class A ordinary shares to redemption value | |
| - | | |
| 3,336,139 | | |
| - | | |
| - | | |
| - | | |
| (3,336,139 | ) | |
| (3,336,139 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,420,470 | | |
| 1,420,470 | |
Balance as of March 31, 2024 (unaudited) | |
| 16,880,481 | | |
$ | 190,691,784 | | |
| 5,750,000 | | |
$ | 575 | | |
$ | 30,000 | | |
$ | (9,039,353 | ) | |
$ | (9,008,778 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Redemption of Class A ordinary shares | |
| (12,339,057 | ) | |
| (141,300,945 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Deemed contribution for administrative support - related party | |
| - | | |
| - | | |
| - | | |
| - | | |
| 30,000 | | |
| - | | |
| 30,000 | |
Accretion of Class A ordinary shares to redemption value | |
| - | | |
| 2,922,179 | | |
| - | | |
| - | | |
| - | | |
| (2,922,179 | ) | |
| (2,922,179 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,048,967 | | |
| 2,048,967 | |
Balance as of June 30, 2024 (unaudited) | |
| 4,541,424 | | |
$ | 52,313,018 | | |
| 5,750,000 | | |
$ | 575 | | |
$ | 60,000 | | |
$ | (9,912,565 | ) | |
$ | (9,851,990 | ) |
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2023
| |
Ordinary Shares
Subject to Possible
Redemption | | |
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 | |
| 23,000,000 | | |
$ | 240,311,986 | | |
| 5,750,000 | | |
| 575 | | |
$ | - | | |
$ | (9,446,841 | ) | |
$ | (9,446,266 | ) |
Accretion of Class A ordinary shares to redemption value | |
| - | | |
| 2,569,175 | | |
| - | | |
| - | | |
| - | | |
| (2,569,175 | ) | |
| (2,569,175 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,278,938 | | |
| 2,278,938 | |
Balance as of March 31, 2023 (unaudited) | |
| 23,000,000 | | |
$ | 242,881,161 | | |
| 5,750,000 | | |
$ | 575 | | |
$ | - | | |
$ | (9,737,078 | ) | |
$ | (9,736,503 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Redemption of Class A ordinary shares | |
| (6,119,519 | ) | |
| (65,163,747 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Accretion of Class A ordinary shares to redemption value | |
| - | | |
| 2,971,830 | | |
| - | | |
| - | | |
| - | | |
| (2,971,830 | ) | |
| (2,971,830 | ) |
Net income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3,408,179 | | |
| 3,408,179 | |
Balance as of June 30, 2023 (unaudited) | |
| 16,880,481 | | |
$ | 180,689,244 | | |
| 5,750,000 | | |
$ | 575 | | |
$ | - | | |
$ | (9,300,729 | ) | |
$ | (9,300,154 | ) |
The accompanying notes are an integral part of these
unaudited condensed financial statements.
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| |
FOR THE
SIX MONTHS ENDED
JUNE 30,
2024 | | |
FOR THE
SIX MONTHS ENDED
JUNE 30,
2023 | |
Cash Flows from Operating Activities | |
| | |
| |
Net income | |
$ | 3,469,437 | | |
$ | 5,687,117 | |
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| | |
Realized gain on investments held in Trust Account | |
| (4,690,197 | ) | |
| (5,241,005 | ) |
Interest on related party promissory note | |
| 5,795 | | |
| - | |
Deemed contribution for administrative support - related party | |
| 60,000 | | |
| - | |
Change in fair value of derivative warrant liabilities | |
| 644,800 | | |
| (1,133,600 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| (134,777 | ) | |
| 91,012 | |
Accounts payable | |
| (60,144 | ) | |
| 19,470 | |
Accrued expenses | |
| 191,714 | | |
| 201,854 | |
Net cash used in operating activities | |
| (513,372 | ) | |
| (375,152 | ) |
Cash Flows from Investing Activities | |
| | | |
| | |
Purchase of U.S. government treasury obligations | |
| (385,455,833 | ) | |
| (488,193,585 | ) |
Proceeds from redemption of U.S. government treasury obligations | |
| 383,887,712 | | |
| 487,893,585 | |
Trust Account Withdrawal - redemption | |
| 141,300,945 | | |
| 65,163,747 | |
Net cash provided by investing activities | |
| 139,732,824 | | |
| 64,863,747 | |
Cash Flows from Financing Activities | |
| | | |
| | |
Redemption of Class A shares | |
| (141,300,945 | ) | |
| (65,163,747 | ) |
Proceeds from note payable and advances from related party | |
| 2,058,121 | | |
| 300,000 | |
Repayment of note payable and advances from related party | |
| - | | |
| (3,144 | ) |
Net cash used in financing activities | |
| (139,242,824 | ) | |
| (64,866,891 | ) |
| |
| | | |
| | |
Net decrease in cash | |
| (23,372 | ) | |
| (378,296 | ) |
Cash - beginning of period | |
| 47,046 | | |
| 707,749 | |
Cash - end of period | |
$ | 23,674 | | |
$ | 329,453 | |
| |
| | | |
| | |
Supplemental disclosure of noncash investing and financing activities: | |
| | | |
| | |
Accretion of Class A shares to redemption value | |
$ | 6,258,318 | | |
$ | 5,541,005 | |
The accompanying notes are an integral part of these
unaudited condensed financial statements.
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION
CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 - Description of Organization, Business Operations, and
Going Concern
Patria Latin American Opportunity Acquisition
Corp. (the “Company”) is a blank check company incorporated in Cayman Islands on February 25, 2021. The Company was formed
for the purpose of effecting a merger, capital stock exchange, asset acquisition, ordinary shares purchase, reorganization, or similar
business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and,
as such, the Company is subject to all of the risks associated with emerging growth companies.
On May 9, 2024 the Company received a
written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that since
the Company’s aggregate market value of its outstanding warrants was less than $1 million, the Company was no longer in
compliance with the Nasdaq Global Market continued listing criteria set forth in Listing Rule 5452(b)(C), which requires the Company
to maintain an aggregate market value of its outstanding warrants of at least $1 million (the “Notice”). The Notice
additionally indicated that the Company, pursuant to the Listing Rules, has 45 calendar days, or until June 24, 2024, to submit a
plan to regain compliance. The Company submitted a plan to regain compliance on July 31, 2024. As of the date of this report, the
Company has not received a response from Nasdaq. If Nasdaq accepts the Company’s plan, the Company will
have 180 calendar days from the date of the Notice, or until November 5, 2024, to evidence compliance. If Nasdaq were to reject the
Company’s plan, Nasdaq rules permit the Company to appeal the decision to a hearings panel.
As of June 30, 2024, the Company had not commenced
any operations. All activities for the period from February 25, 2021 (inception), through June 30, 2024, relates to the Company’s
formation, and the initial public offering (“IPO”) described below, and post-IPO expenses. The Company will not generate any
operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income
in the form of realized and unrealized gains on investments from the proceeds derived from the IPO.
On March 14, 2022, the Company consummated its
IPO of 23,000,000 units (the “Units”), including the issuance of 3,000,000 Units as a result of the underwriters exercise
in full of the over-allotment option. Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (the
“Class A Ordinary Shares”), and one-half of one redeemable warrant of the Company (each whole warrant, a “Public Warrant”),
with each Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50 per share, subject to adjustment.
The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $230,000,000.
The Company’s sponsor is Patria SPAC LLC,
a Cayman Islands exempted limited partnership (the “Sponsor”). Simultaneously with the closing of the IPO and pursuant to
the private placement warrants purchase agreement, the Company completed the private sale of 14,500,000 warrants (the “Private Placement
Warrants” and together with the Public Warrants, the “Warrants”) to the Sponsor at a purchase price of $1.00 per Private
Placement Warrant, generating gross proceeds to the Company of $14,500,000.
Transaction costs amounted to $13,779,665, including
$8,050,000 in deferred underwriting fees payable, $4,600,000 in underwriting fees paid and $1,129,665 in other offering costs, of which
$314,508 were expensed and $13,456,157 charged to temporary equity.
Following the closing of the IPO on March
14, 2022, an amount of $236,900,000 ($10.30 per Unit) of the proceeds from the IPO and the sale of the Private Placement Warrants,
comprised of $225,400,000 of the proceeds from the IPO (which is net of $4,600,000 of the underwriters’ fees) and $11,500,000
of the proceeds of the sale of Private Placement Warrants, was placed in a U.S.-based trust account (the “Trust
Account”) at J.P. Morgan Chase Bank, N.A. maintained by Continental Stock Transfer & Trust Company, acting as trustee. The
funds in the Trust Account were invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or in
money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in
direct U.S. government treasury obligations. Except with respect to earnings on the funds held in the Trust Account after the
redemption that may be released to the Company to pay its taxes, if any, the proceeds from the IPO and the sale of the Private
Placement Warrants held in the Trust Account will not be released from the Trust Account until the earliest of: (i) the completion
of the Initial Business Combination; (ii) the redemption of the Class A Ordinary Shares included in the Units (the “Public
Shares”) if the Company is unable to complete the Initial Business Combination by 27 months after the closing of our IPO on
March 14, 2022 (the “Combination Period”); or (iii) the redemption of the Public Shares properly submitted in connection
with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association to (A) modify the
substance or timing of the Company’s obligation to allow redemption in connection with the Initial Business Combination or to
redeem 100% of the Public Shares if the Company has not consummated the Initial Business Combination within the Combination Period
or (B) with respect to any other material provisions relating to shareholders’ rights or pre-Initial Business Combination
activity. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any,
which could have priority over the claims of the Company’s public shareholders. The remaining proceeds outside the Trust
Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and
administrative expenses.
First Extension
On June 12, 2023, the Company held an extraordinary
general meeting of the Company’s shareholders (the “Extraordinary General Meeting”). At the Extraordinary General Meeting,
the Company’s shareholders approved amendments to the Company’s Amended and Restated Memorandum and Articles of Association
to extend the termination date by which the Company has to consummate an initial business combination from June 14, 2023 to June 14, 2024,
in addition to other proposals. Accordingly, the Company had up to June 14, 2024 to consummate its initial business combination. In connection
with the Extraordinary General Meeting, shareholders holding an aggregate of 6,119,519 of the Company’s Class A ordinary shares
exercised their right to redeem their shares on June 14, 2023. Following such redemptions, 16,880,481 Class A ordinary shares remained
outstanding and subject to redemption and the Trust Account had a remainder balance of $180 million immediately following the withdrawal
for Class A ordinary shares redemption.
Second Extension
On June 12, 2024, the Company held an
extraordinary general meeting of the Company’s shareholders (the “Extraordinary General Meeting”). At the
Extraordinary General Meeting, the Company’s shareholders approved the Extension Amendment Proposal to amend, by way of
special resolution, the Company’s Articles, as set forth in the Trust Agreement dated as of March 9, 2022 by and between the
Company and the Trustee, to extend the Termination Date by which the Company has to consummate a Business Combination from June 14,
2024 (the date which is 27 months from the closing date of the Company’s IPO) on a monthly basis for up to fifteen times by an
additional one month each time up to September 14, 2025 (the date which is 42 months from the closing date of the Company’s
IPO), unless the closing of a Business Combination shall have occurred prior thereto or such earlier date as determined by the
Board, for a deposit, for each monthly extension, of the lesser of (i) $75,000 and (ii) $0.015 for each Class A ordinary share then
outstanding. In connection with the Extraordinary General Meeting, shareholders holding an aggregate of 12,339,057 of the
Company’s Class A ordinary shares exercised their right to redeem their shares at approximately $11.45 per share or
$141,300,945. Following such redemptions, 4,541,424 Class A ordinary shares remain outstanding and subject to redemption and the
Trust Account had a remainder balance of approximately $52 million immediately following the withdrawal for Class A ordinary shares
redemptions. The Company also deposited $68,121 into the Trust Account to effect the extension of the termination date for an
additional one-month period, from June 14, 2024 to July 14, 2024. We made an aggregate subsequent deposit of $136,242 on July 14,
2024 and August 9, 2024 into the Trust Account to extend the termination date through September 14, 2024.
As of June 30, 2024 and December 31, 2023, the
Company had deposited $3,668,121 and $2,100,000 respectively, in connection with these extensions into the Trust Account. These amounts
are included in the balances of marketable securities held in Trust Accounts, promissory note – related party, and due to related party on the Company’s unaudited
condensed balance sheets.
Initial Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO, 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 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commission
held in Trust and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business
Combination. However, the Company only intends to complete a Business Combination if the post-business combination company owns or acquires
50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment
Company Act”). Upon the closing of the IPO, management has agreed that an amount equal to at least $10.30 per Unit sold in the IPO,
including the proceeds from the sale of the Private Placement Warrants, was held in a Trust Account located in the United States with
Continental Stock Transfer & Trust Company acting as trustee, and invested only in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations,
as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust
Account as described below. The Company provides the holders (the “Public Shareholders”) of the Company’s issued and
outstanding Class A Ordinary Shares, par value $0.0001 per share, sold in the IPO (the “Public Shares”) with the opportunity
to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder
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 Business Combination or conduct a tender offer will be made by the Public Shares for a pro rata portion of the
amount then held in the Trust Account. The per-share amount to be distributed to Public Shareholders who redeem their Public Shares will
not be reduced by the deferred underwriting commissions the Company will pay to the underwriters. If the Company seeks shareholder approval,
the Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination.
If a shareholder vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons,
the Company will, pursuant to its Amended and Restated Articles of Association (the “Articles of Association”), conduct the
redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer
documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by
law, or the Company decides to obtain shareholder approval for business or legal reasons, the Company will offer to redeem the Public
Shares then outstanding in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.
Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed
transaction. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined
below) have agreed to vote their Founder Shares (as defined below) and any Public Shares purchased during or after the IPO in favor of
a Business Combination. In addition, the initial shareholders have agreed to waive their redemption rights with respect to their Founder
Shares and Public Shares in connection with the completion of a Business Combination.
The Articles of Association provides that a Public
Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as
a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent
of the Company. The holders of the Founder Shares (the “initial shareholders”) have agreed not to propose an amendment to
the Articles of Association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection
with a Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the
Combination Period (as defined below) or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares
in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within the Combination Period and the Company’s shareholders have not amended the Articles of Association to extend
such Combination Period, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably
possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the Public Shares then outstanding,
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 taxes, if any (less up to $100,000 of interest
to pay dissolution expenses) divided by the number of the then outstanding Public Shares, which redemption will completely extinguish
Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject
to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders
and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman law to provide
for claims of creditors and the requirements of other applicable law.
The initial shareholders have agreed to waive
their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a
Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares after the IPO, they will
be entitled to liquidating distributions from the Trust if the Company fails to complete a Business Combination within the Combination
Period. The underwriters have agreed to waive their rights to the deferred underwriting commission held in the Trust Account in the event
the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included
with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such
distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account
assets) will be only $10.30. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company
if and to the extent any claims by a third party (except for 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 (a “Target”), reduce the amount of funds in the Trust Account to below (i) $10.30 per unit or (ii) the lesser amount
per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the
trust assets, in each case net of interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims
by a third party or Target that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims
under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against
a third party, our sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to
reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all
vendors, service providers (other than the Company’s independent registered public accounting firm), prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
Going Concern
As of June 30, 2024, the Company had working capital of $42,461,028.The working capital surplus includes the amount of restricted marketable
securities held in the Trust Account, deferred underwriting fees payable and derivative warrant liabilities, all of which have been classified
as current at June 30, 2024. The Company’s ability to continue operations through the liquidation date is contingent on the payment
of the monthly extension deposit. Working capital deficit would be $(4,402,190) if the line items described above were not included in
the working capital calculation. Cash of $23,674 was held outside of the Trust Account and is available for the Company’s working
capital purposes as of June 30, 2024.
The Company anticipates that the cash held outside
of the Trust Account as of June 30, 2024 will not be sufficient to allow the Company to operate for at least the next 12 months from the
issuance of these unaudited condensed financial statements, assuming that a Business Combination is not consummated during that time.
Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing accounts payable and
accrued liabilities, 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 the Business Combination. These conditions raise substantial doubt about the Company’s ability to continue as a
going concern for a period of time within one year after the date that the unaudited condensed financial statements are issued. Management
plans to address this uncertainty through consummating a business combination. In addition, 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 under
the Working Capital Loans. There is no assurance that the Company’s plans to consummate the Business Combination will be successful
or successful within the Combination Period or that the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers
and directors will loan the Company funds as may be required under the Working Capital Loans.
These unaudited condensed financial statements
do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be
necessary should the Company be unable to continue as a going concern.
Risks and Uncertainties
Global economic conditions have been worsening,
with disruptions to, and volatility in, the credit and financial markets and rising inflation and interest rates in the U.S. If these
conditions persist and deepen, the Company could experience an inability to access additional capital, or our liquidity could otherwise
be impacted. Management continues to evaluate the impact related to rising interest rates and current market condition and has concluded
while it is reasonably possible that these factors could have a negative effect on the Company’s financial position and results
of its operations, the specific impact is not readily determinable as of the date of the unaudited condensed financial statements. The
unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The credit and financial markets have experienced
extreme volatility and disruptions due to the current conflict between Ukraine and Russia. The conflict is expected to have further global
economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines
in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability.
In addition, the United States and other countries have imposed sanctions on Russia, which increases the risk that Russia, as a retaliatory
action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences,
including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary
shares to be adversely affected.
Note 2 - Summary of 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 (“U.S.
GAAP”) for information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and
Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in financial statements prepared
in accordance with U.S. GAAP have been 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 comprehensive 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 statement of the financial position, operating results and cash flows for
the periods presented.
Emerging Growth Company
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. 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 an emerging growth company can elect to opt out of the extended
transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is
irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or
revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt
the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s
financial statements with another public company that is neither an emerging growth company nor an emerging growth company which has opted
out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of these unaudited condensed financial
statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited 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 unaudited 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 $23,674 and $47,046 in cash outside
of the funds held in the Trust Account, as of June 30, 2024 and December 31, 2023, respectively. The Company did not have any cash equivalents
as of June 30, 2024 and December 31, 2023.
Marketable Securities Held in Trust Account
The assets held in the Trust Account were held
in U.S. government treasury obligations with maturities of 185 days or less, which were invested in U.S. Treasury securities. Trading
securities are presented on the balance sheet at fair value at the end of each reporting period. Earnings on these securities were included
in realized gain on investments held in Trust Account in the accompanying unaudited condensed statements of operations.
Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under Accounting Standards Codification (“ASC”) 820, “Fair Value
Measurement,” approximates the carrying amounts represented in the balance sheet. The Company’s derivative financial instruments
are accounted for as liabilities, and the derivative instrument is recorded at its fair value on the issuance date and is then re-valued
at each reporting date. The fair value of the Company’s derivative financial instruments is evaluated at the end of each reporting
period, with changes in the fair value reported in the statements of operations. The Company had no other financial assets or liabilities
that were required to be measured at fair value on a recurring basis.
Fair Value Measurements
Fair value is defined as the price that would
be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement
date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy
gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and
the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
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 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 of liabilities, that are observable, or (iv) inputs that are derived principally
from or corroborated by market data through correlation or other means.
Level 3 - Valuations based on inputs that are
unobservable and significant to the overall fair value measurement.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure
requirements of ASC 260, “Earnings Per Share.” Net income (loss) per ordinary share is computed by dividing net income by
the weighted average number of ordinary share outstanding during the period. The Company did not have any dilutive securities and other
contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. For the
three and six months ended June 30, 2024 and 2023, the Company has not considered the effect of the warrants sold in the Initial Public
Offering and Private Placements to purchase Class A Ordinary Shares in the calculation of diluted income (loss) per share, since their
inclusion is contingent on a future event. As a result, diluted income (loss) per share is the same as basic income (loss) per share for
the periods presented.
A reconciliation of the income (loss) per share is below:
| |
For The Three
Months Ended
June 30,
2024 | | |
For The Three
Months Ended
June 30,
2023 | |
Net income | |
$ | 2,048,967 | | |
$ | 3,408,179 | |
Accretion of temporary equity in excess of fair value | |
| (2,922,179 | ) | |
| (2,971,830 | ) |
Net (loss) income including accretion of temporary equity in excess of fair value | |
$ | (873,212 | ) | |
$ | 436,349 | |
| |
For The Six
Months Ended
June 30,
2024 | | |
For The Six
Months Ended
June 30,
2023 | |
Net income | |
$ | 3,469,437 | | |
$ | 5,687,117 | |
Accretion of temporary equity in excess of fair value | |
| (6,258,318 | ) | |
| (5,541,005 | ) |
Net (loss) income including accretion of temporary equity in excess of fair value | |
$ | (2,788,881 | ) | |
$ | 146,112 | |
The Company’s statements of operations include
a presentation of income (loss) per share for shares of ordinary shares subject to possible redemption in a manner similar to the two-class
method of earnings per share. With respect to the accretion of the Class A Ordinary Shares subject to possible redemption and consistent
with ASC 480, “Distinguishing Liabilities from Equity,” in accordance with ASC 480-10-S99-3A, the Company has treated the
accretion in excess of fair value in the same manner as a dividend, to the extent the redemption value exceeds the fair value, in the
calculation of the net income (loss) per ordinary share.
| |
For The
Three Months Ended
June 30, 2024 | | |
For The
Three Months Ended
June 30, 2023 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income (loss) per share | |
| | |
| | |
| | |
| |
Numerator | |
| | |
| | |
| | |
| |
Allocation of net income (loss) including accretion of temporary equity in excess of fair value | |
$ | (626,183 | ) | |
$ | (247,029 | ) | |
$ | 345,020 | | |
$ | 91,329 | |
Deemed dividend for accretion of temporary equity in excess of fair value | |
| 2,922,179 | | |
| - | | |
| 2,971,830 | | |
| - | |
Allocation of net income (loss) and deemed dividend | |
$ | 2,295,996 | | |
$ | (247,029 | ) | |
$ | 3,316,850 | | |
$ | 91,329 | |
Denominator | |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding, basic and diluted | |
| 14,575,382 | | |
| 5,750,000 | | |
| 21,722,298 | | |
| 5,750,000 | |
Basic and diluted net income (loss) per share | |
$ | 0.16 | | |
$ | (0.04 | ) | |
$ | 0.15 | | |
$ | 0.02 | |
| |
For The
Six Months Ended
June 30, 2024 | | |
For The
Six Months Ended
June 30, 2023 | |
| |
Class A -
Temporary Equity | | |
Class B | | |
Class A -
Temporary Equity | | |
Class B | |
Basic and diluted net income (loss) per share | |
| | |
| | |
| | |
| |
Numerator | |
| | |
| | |
| | |
| |
Allocation of net income (loss) including accretion of temporary equity in excess of fair value | |
$ | (2,042,251 | ) | |
$ | (746,630 | ) | |
$ | 116,222 | | |
$ | 29,890 | |
Deemed dividend for accretion of temporary equity in excess of fair value | |
| 6,258,318 | | |
| - | | |
| 5,541,005 | | |
| - | |
Allocation of net income (loss) and deemed dividend | |
$ | 4,216,067 | | |
$ | (746,630 | ) | |
$ | 5,657,227 | | |
$ | 29,890 | |
Denominator | |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding, basic and diluted | |
| 15,727,932 | | |
| 5,750,000 | | |
| 22,357,620 | | |
| 5,750,000 | |
Basic and diluted net income (loss) per share | |
$ | 0.27 | | |
$ | (0.13 | ) | |
$ | 0.25 | | |
$ | 0.01 | |
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 ASC 480.
Conditionally redeemable ordinary shares (including
ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence
of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares
are classified as shareholders’ equity. The Company’s Class A Ordinary Shares feature contains certain redemption rights that
are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, Class
A Ordinary Shares subject to possible redemption are classified as temporary equity, outside of the shareholders’ equity section
of the Company’s balance sheets. Accordingly, as of June 30, 2024, 4,541,424 Class A Ordinary Shares subject to possible redemption
is presented at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance
sheets.
The Class A Ordinary Shares subject to possible
redemption are subject to the subsequent measurement guidance in ASC 480-10-S99. Under such guidance, the Company must subsequently measure
the shares to their redemption amount because, as a result of the allocation of net proceeds to transaction costs, the initial carrying
amount of the ordinary shares is less than $10.00 per share. In accordance with the guidance, the Company has elected to measure the ordinary
shares subject to possible redemption to their redemption amount (i.e., $10.30 per share) immediately as if the end of the first reporting
period after the IPO, March 14, 2022, was the redemption date. Such changes are reflected in additional paid-in capital, or in the absence
of additional paid-in capital, in accumulated deficit. For the six months ended June 30, 2024, the Company recorded an accretion of $6,258,318.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815,
“Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument
is initially recorded at its fair value on the issuance date and is then re-valued at each reporting date, with changes in the fair value
reported in the 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 sheet
as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months
of the balance sheet date.
Derivative Warrant Liabilities
The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet
the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under
ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification.
This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the
time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required
to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of the warrants are recognized as a non-cash gain or loss under the caption change in fair value of derivative warrant liabilities
on the statements of operations. The warrants were valued using a Monte Carlo simulation model until the Class A ordinary shares and warrants
began trading separately on May 4, 2022. Since May 4, 2022, the Public Warrants have been measured using the listed market price and the
Private Placement Warrants have been measured by reference to the trading price of the Public Warrants.
The Class A Ordinary Shares and warrants comprising
the units began separate trading on the 52nd day following the date of the IPO. No fractional warrants issued upon separation of the units
and only whole warrants will trade. Accordingly, unless a multiple of two units is purchased, the number of warrants issuable to you upon
separation of the units will be rounded down to the nearest whole number of warrants.
Additionally, the units will automatically separate
into their component parts and will not be traded after completion of the Initial Business Combination.
Share-based Compensation
The Company accounts for Founder Shares issued
to its independent directors in accordance with SEC Staff Accounting Bulletin 5T and ASC 718, “Compensation-Stock Compensation.”
The fair value of the Founder Shares issued in this arrangement was determined using the implied stock price as of the date of Initial
Public Offering of the Company’s Class A ordinary shares and the probability of the success of the Business Combination.
Offering Costs
Offering costs consist of legal, accounting, underwriting
and other costs incurred that are directly related to the IPO. Upon the completion of the IPO, the offering costs were allocated using
the relative fair values of the Company’s Class A Ordinary Shares and its Public Warrants and Private Placement Warrants. The costs
allocated to warrants were recognized in other expenses and those related to the Company’s Class A Ordinary Shares were charged
against the carrying value of Class A Ordinary Shares.
Underwriting Fees Waiver
The waiver of the deferred underwriting fees liability
is allocated between the instruments issued at the Initial Public Offering. A portion of the deferred underwriting fees waived are allocated
to income for the amounts previously allocated to the fair value of liability instruments issued, which was initially expensed. The remaining
deferred underwriting fees waived are recorded in accumulated deficit with a related increase in income available to Class B Ordinary
Shares for the amounts previously recognized as a deemed dividend that reduced the net income available to Class B Ordinary Shares (as
the Class A Ordinary Shares Subject to Possible Redemption were accreted to their maximum redemption amount).
Income Taxes
The Company follows the asset and liability method
of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the unaudited condensed financial statements carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation
allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and
a measurement attribute for the 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 June 30, 2024 and December 31, 2023,
there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties.
There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.
U.S. taxation could be imposed 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. Additionally, given the nature of the investment income generated from the funds held in the
trust account, it is not subject to tax withholdings in the U.S. Moreover, the Company determined that no income tax liability would arise
from any other jurisdictions outside of the Cayman Islands. Consequently, income taxes are not reflected in the Company’s unaudited
condensed financial statements.
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. The Company has not experienced losses on this account and management believes the Company is not exposed
to significant risks on such account.
Recent Accounting Pronouncements
The Company’s management does not believe
that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the
accompanying unaudited condensed financial statements.
Note 3 - Initial Public Offering
Pursuant to the IPO, the Company sold 23,000,000
Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A Ordinary Share and one-half of one redeemable
warrant (“Public Warrant”). Each Public Warrant entitles the holder to purchase one share of Class A Ordinary Shares at an
exercise price of $11.50 per whole share.
The Company had granted the Underwriters in the
IPO (the “Underwriters”) a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments, which was
exercised in full on the IPO date.
On June 12, 2023, 6,119,519 Class A ordinary shares
were redeemed by the Company’s shareholders in connection with the Extraordinary General Meeting mentioned in Note 1. Following
such redemptions, 22,630,481 ordinary shares remained outstanding, consisting of 16,880,481 Class A ordinary shares and 5,750,000 Class
B ordinary shares.
On June 12, 2024, 12,339,057 Class A ordinary
shares were redeemed by the Company’s shareholders in connection with the Extraordinary General Meeting mentioned in Note 1. Following
such redemptions, 10,291,424 ordinary shares remained outstanding, consisting of 4,541,424 Class A ordinary shares and 5,750,000 Class
B ordinary shares.
Note 4 - Private Placement Warrants
Simultaneously with the closing of the IPO, the
Sponsor purchased an aggregate of 14,500,000 of Private Placement Warrants, including the overallotment option, at a price of $1.00 per
Private Placement Warrant ($14,500,000 in the aggregate). Each Private Placement Warrant is exercisable to purchase one share of Class
A Ordinary Shares at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds
from the IPO held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds
from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements
of applicable law) and the Private Placement Warrants will expire worthless. Upon the purchase of the Private Placement Warrants by the
Sponsor, the Company recorded the excess proceeds received over the fair value of the Private Placement Warrants as additional paid-in
capital amounting to $9,251,000.
Note 5 - Related Party Transactions
Founder Shares
On March 3, 2021, one of our officers paid
$25,000, to cover certain of our offering costs, in exchange for an aggregate of 7,187,500 Class B ordinary shares (the
“Founder Shares”), which were temporarily issued to such officer until such shares were transferred to our sponsor in
April 2021. Our Sponsor was formed on March 9, 2021. In February 2022, our Sponsor forfeited 1,437,500 Founder Shares for no
consideration, remaining with 5,750,000 Founder Shares. Prior to the IPO, on March 9, 2022, our Sponsor transferred 30,000 of our
Founder Shares to each of our three independent directors. These 90,000 shares were not subject to forfeiture. The allocation of the
Founder Shares to the directors is in the scope of ASC 718. Under ASC 718, share-based compensation associated with
equity-classified awards is measured at fair value upon the grant date. The Company used the Monte Carlo model to estimate the fair
value associated with the Founder Shares granted. The fair value of the 90,000 shares granted to the Company’s directors in
March 2022 was $662,245 or $7.36 per share. The Founder Shares were granted subject to a performance condition, the occurrence of an
Initial Business Combination. Compensation expense related to the Founder Shares is recognized only when the performance condition
is probable of occurrence under ASC 718. The Company determined the performance conditions are not considered probable, and,
therefore, no share-based compensation expense was recognized as of June 30, 2024 and December 31, 2023. As of June 30, 2024 and
December 31, 2023, the unrecognized stock compensation expense was $662,245.
On March 14, 2022, the underwriters fully exercised
the over-allotment option; thus, the 750,000 Founder Shares are no longer subject to forfeiture.
The Sponsor has agreed not to transfer, assign
or sell any of their founder shares and any Class A Ordinary Shares issued upon conversion thereof until the earlier to occur of (A) one
year after the completion of our initial business combination; or (B) subsequent to our initial business combination, (x) if the last
reported sale price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days
after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete
a liquidation, merger, amalgamation, stock exchange, reorganization or other similar transaction that results in all of our public shareholders
having the right to exchange their Class A Ordinary Shares for cash, securities or other property.
The Founder Shares will convert concurrently with
or immediately following the consummation of our initial business combination at the option of the holders thereof or at any earlier date
at the option of the holders thereof (where such holders have waived any right to receive funds from the trust account) on a one-for-one
basis, subject to adjustment for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like, and subject
to further adjustment as provided herein. In the case that additional Class A Ordinary Shares or equity-linked securities are issued or
deemed issued in connection with the Company’s Initial Business Combination, the number of Class A Ordinary Shares issuable upon
conversion of all Founder Shares will equal, in the aggregate, 20% of the total number of Class A Ordinary Shares outstanding after such
conversion (after giving effect to any redemptions of Class A Ordinary Shares by Public Shareholders), including the total number of Class
A Ordinary Shares issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or
deemed issued, by the Company in connection with or in relation to the consummation of the Initial Business Combination, excluding any
Class A Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, or to be issued,
to any seller in the Initial Business Combination and any Private Placement Warrants issued to the Sponsor, or the Company’s officers
or directors upon conversion of Working Capital Loans; provided that such conversion of Founder Shares will never occur on a less than
one-for-one basis.
Promissory Note - Related Party
On March 3, 2021, the Company issued an unsecured
promissory note (the “Promissory Note”) to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal
amount of $250,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2023, and (ii) the completion
of the IPO. On January 31, 2022, the Company amended the unsecured Promissory Note to provide an additional borrowing of $250,000, for
a total borrowing capacity of $500,000. Promissory note balance as of December 31, 2021 was $437,508 which was fully paid upon the Company’s
consummation of its initial public offering.
On December 6, 2023, the Company entered into
another promissory note agreement with the Sponsor. This note is payable on demand and has an interest rate equal to the CME Term Secured Overnight Financing Rate (SOFR) three-month rate, fixed on a quarterly basis. As of June 30, 2024
and December 31, 2023, the Company has $490,000 and $0 outstanding balance on the promissory note respectively.
On June 12, 2024, the Company entered into another
promissory note agreement with the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $1,125,000.
The promissory note is non-interest bearing and payable on the earlier of (i) December 31, 2025, and (ii) the consummation of the Initial
Business Combination. As of June 30, 2024, the Company had $73,916 outstanding balance on the promissory note.
Due to Related Party
As of June 30, 2024 and December 31, 2023, the
Company had an outstanding balance of $3,600,000 and $2,100,000 due to the Sponsor in the form of a loan in connection with the extension
of the termination date through July 14, 2024. This loan is due on demand, has no interest, and is forgiven should the Company not complete
an initial business combination.
Administrative Services Agreement
Following our IPO, the Company pays the Sponsor
or an affiliate a monthly fee of $10,000 for office space, utilities, secretarial and administrative services. In August 2023, the Company
and its Sponsor executed an agreement to discontinue the remittance of administrative fees to the Sponsor with an effective date of August
1, 2023. The $30,000 and $60,000 incurred for the periods ended March 31, 2024 and June 30, 2024, respectively were included within formation
and operating costs on the accompanying unaudited condensed statements of operations and as a deemed capital contribution within the accompanying
condensed statements of Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit. For the periods ended March 31,
2023 and June 30, 2023, the Company incurred and paid $30,000 and $60,000 respectively under this agreement and were included within formation
and operating costs on the accompanying unaudited condensed statements of operations.
Working Capital Loans
In order to finance transaction costs in connection
with a 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 a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination or, at the lender’s discretion, up to $2,000,000 of such Working Capital Loans may be convertible into
warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement
Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements
exist with respect to such loans. As of June 30, 2024 and December 31, 2023, the Company had no borrowings under the Working Capital Loans.
Note 6 - Commitments and Contingencies
Registration Rights
The holders of Founder Shares and Private Placement
Warrants, including any that may be issued upon conversion of Working Capital Loans, if any (and any Class A Ordinary Shares issuable
upon the exercise of the Private Placement Warrants, including any that may be issued upon conversion of the Working Capital Loans), will
be entitled to registration rights pursuant to a registration rights agreement entered into prior to the consummation of the IPO. These
holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement
provides that the Company is not required to effect or permit any registration or cause any registration statement to become effective
until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such
registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from the date of the IPO to purchase up to an additional 3,000,000 Units to cover over-allotments. The underwriters fully exercised
the over-allotment option concurrently with the close of the IPO. The underwriters were entitled to a cash underwriting discount of $0.20
per Unit (or $4,600,000) of the gross proceeds of the IPO. Additionally, the underwriters would be entitled to a deferred underwriting
commission of $0.35 per Unit (or $8,050,000) of the gross proceeds of the IPO upon the completion of the Company’s Initial Business
Combination. The deferred underwriting commissions would become payable to the underwriters from the amounts held in the Trust Account
solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement.
On December 4, 2023, the Company received an executed
deferred underwriting fees waiver letter from J.P. Morgan Securities LLC., one of the Company’s underwriters, informing the Company
of its decision to waive any entitlement it may have to its deferred underwriting fees payable held in the Trust Account in respect of
any Business Combination. The waiver does not cover deferred underwriting fees payable to Citigroup Global Market Inc. (representing 50%
of the total deferred underwriting fees payable).
Note 7 - Derivative Warrant Liabilities
The Company accounted for the 26,000,000 Warrants
issued in connection with the IPO (the 11,500,000 of Public Warrants and the 14,500,000 of Private Placement Warrants) in accordance with
the guidance contained in ASC 815-40. Such guidance provides that because the Warrants do not meet the criteria for equity treatment thereunder,
each Warrant much be recorded as a liability. Accordingly, the Company classifies each Warrant as a liability at its fair value. This
liability is subject to re-measurement at each balance sheet date. With each such remeasurement, the warrant liability will be adjusted
to fair value, with the change in fair value recognized in the Company’s statements of operations.
Each whole Warrant entitles the holder thereof
to purchase one Class A Ordinary Share at a price of $11.50 per share, subject to adjustment. Only whole Warrants are exercisable. The
Warrants will become exercisable 30 days after the completion of the Initial Business Combination and will expire five years after the
completion of the Initial Business Combination or earlier upon redemption or liquidation.
Public Warrants may only be exercised for a whole
number of shares. No fractional Public Warrants issued upon separation of the Units and only whole Public Warrants will trade. The Public
Warrants will become exercisable 30 days after the completion of an Initial Business Combination provided that the Company has an effective
registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the Public Warrants and
a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities,
or blue sky, laws of the state of residence of the holder (or holders are permitted to exercise their Public Warrants on a cashless basis
under certain circumstances as a result of (i) the Company’s failure to have an effective registration statement by the 60th
business day after the closing of the Initial Business Combination or (ii) a notice of redemption described under “Redemption
of Warrants when the price per Class A Ordinary Share equals or exceeds $10.00”). The Company has agreed that as soon as practicable,
but in no event later than 20 business days after the closing of its Initial Business Combination, the Company will use its commercially
reasonable efforts to file with the SEC a post-effective amendment to the registration statement for the IPO or a new registration statement
covering the Class A Ordinary Shares issuable upon exercise of the Warrants and will use its commercially reasonable efforts to cause
the same to become effective within 60 business days after the closing of the Company’s Initial Business Combination and to maintain
a current prospectus relating to those Class A Ordinary Shares until the Warrants expire or are redeemed. If the shares issuable upon
exercise of the Public Warrants are not registered under the Securities Act in accordance with the above requirements, the Company will
be required to permit holders to exercise their Public Warrants on a cashless basis. However, no Warrant will be exercisable for cash
or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their Warrants, unless
the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
or an exemption from registration is available. Notwithstanding the above, if the Company’s Class A Ordinary Shares are at the time
of any exercise of a Public 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 Public 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, it will not be required to file or maintain in effect a registration statement, and in the event the Company
does not so elect, it 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.
The Warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of an Initial Business Combination or earlier upon
redemption or liquidation. In addition, if (x) the Company issues additional Class A Ordinary Shares or equity-linked securities for capital
raising purposes in connection with the closing of the Initial Business Combination at an issue price or effective issue price of less
than $9.20 per Class A Ordinary Share (with such issue price or effective issue price to be determined in good faith by the board of directors
and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from
such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Initial Business
Combination on the date of the consummation of the Initial Business Combination (net of redemptions) and (z) the volume weighted average
trading price of Class A Ordinary Shares during the 20 trading day period starting on the trading day prior to the day on which the Company
consummates the Initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price
of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price,
and the $10.00 and $18.00 per share redemption trigger prices described under “Redemption of Warrants when the price per Class
A Ordinary Share equals or exceeds $10.00” and “Redemption of Warrants when the price per Class A Ordinary Share equals
or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and
the Newly Issued Price, respectively.
The Private Placement Warrants are identical to
the Public Warrants, except that, so long as they are held by the Sponsor or its permitted transferees, (i) they will not be redeemable
by the Company, (ii) they (including the Class A Ordinary Shares issuable upon exercise of these Warrants) may not, subject to certain
limited exceptions, be transferred, assigned or sold by the Sponsor until 30 days after the completion of the Initial Business Combination,
(iii) they may be exercised by the holders on a cashless basis, (iv) are subject to registration rights and (v) use a different Black-Scholes
Warrant Model for purposes of calculating the Black-Scholes Warrant Value (as defined in the warrant agreement).
On the exercise of any Warrant, the Warrant exercise
price will be paid directly to us and not placed in the Trust Account.
Redemption of Warrants when the price per Class
A Ordinary Share equals or exceeds $18.00: 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 $0.01 per Warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption; and |
| ● | if, and only if, the last reported sale price of Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted) for any
20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice
of redemption to the warrant holders. |
The Company will not redeem the Warrants as described
above unless an effective registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise
of the Warrants is effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the 30-day redemption
period. Any such exercise would not be on a cashless basis and would require the exercising warrant holder to pay the exercise price for
each Warrant being exercised.
Redemption of Warrants when the price per Class
A Ordinary Share equals or exceeds $10.00: Once the Warrants become exercisable, the Company may redeem the outstanding Warrants:
| ● | in whole and not in part; |
| ● | at a price of $0.10 per Warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be
able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the
table set forth in the warrant agreement based on the redemption date and the “redemption fair market value” of Class A Ordinary
Shares (as defined below) except as otherwise described in the warrant agreement; |
| ● | if, and only if, the closing price of Class A Ordinary Shares equals or exceeds $10.00 per Public Share (as adjusted) for any 20 trading
days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders;
and |
| ● | if the closing price of the Class A Ordinary Shares for any 20 trading days within a 30-trading day period ending on the third trading
day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted),
the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as
described above. |
Solely for the purposes of this redemption provision,
the “redemption fair market value” of the Company’s Class A Ordinary Shares shall mean the volume weighted average price
of the Class A Ordinary Shares for the ten (10) trading days immediately following the date on which notice of redemption is sent to the
holders of Warrants.
No fractional Class A Ordinary Shares issued upon
redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to
the nearest whole number of the number of Class A Ordinary Shares to be issued to the holder.
Note 8 - Shareholder’s Deficit
Preferred Shares - The Company is
authorized to issue 1,000,000 preferred shares, par value $0.0001 per share, with such designations, voting and other rights and preferences
as may be determined from time to time by the Company’s board of directors. As of June 30, 2024 and December 31, 2023, there were
no preferred shares issued or outstanding.
Class A Ordinary Shares - The Company
is authorized to issue 200,000,000 Class A Ordinary Shares with a par value of $0.0001 per share. As of June 30, 2024 and December 31,
2023, there were 4,541,424 and 23,000,000 shares, respectively, of Class A Ordinary Shares issued and outstanding that are subject to
possible redemption.
Class B Ordinary Shares - The Company
is authorized to issue 20,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of June 30, 2024 and December 31,
2023, 5,750,000 Class B ordinary shares were issued and outstanding.
Holders of the Class A Ordinary Shares and holders
of the 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 or stock exchange rule; provided that only holders of the Class B ordinary shares shall have the right to vote
on the appointment and removal of the Company’s directors prior to the Initial Business Combination or continuing the Company in
a jurisdiction outside the Cayman Islands (including any special resolution required to amend the constitutional documents of the Company
or to adopt new constitutional documents of the Company, in each case, as a result of the Company approving a transfer by way of continuation
in a jurisdiction outside the Cayman Islands).
Note 9 - Fair Value Measurements
The following table presents information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2024.
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Assets | |
| | |
| | |
| | |
| |
Marketable securities held in Trust Account | |
$ | 52,313,018 | | |
$ | - | | |
$ | - | | |
$ | 52,313,018 | |
| |
$ | 52,313,018 | | |
$ | - | | |
$ | - | | |
$ | 52,313,018 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Public Warrants | |
$ | 630,200 | | |
$ | - | | |
$ | - | | |
$ | 630,200 | |
Private Placement Warrants | |
| - | | |
| 794,600 | | |
| - | | |
| 794,600 | |
Total liabilities | |
$ | 630,200 | | |
$ | 794,600 | | |
$ | - | | |
$ | 1,424,800 | |
The following table presents information about the Company’s
assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2023, including the fair value hierarchy
of the valuation techniques that the Company utilized to determine such fair value.
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Total | |
Assets | |
| | |
| | |
| | |
| |
Marketable securities held in Trust Account | |
$ | 187,355,645 | | |
$ | — | | |
$ | — | | |
$ | 187,355,645 | |
Total assets | |
$ | 187,355,645 | | |
$ | — | | |
$ | — | | |
$ | 187,355,645 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Public Warrants | |
$ | 345,000 | | |
$ | — | | |
$ | — | | |
$ | 345,000 | |
Private Placement Warrants | |
| — | | |
| 435,000 | | |
$ | — | | |
| 435,000 | |
Total liabilities | |
$ | 345,000 | | |
$ | 435,000 | | |
$ | — | | |
$ | 780,000 | |
The Warrants are accounted for as liabilities
pursuant to ASC 815-40 and are measured at fair value as of each reporting date. Changes in the fair value of the Warrants are recorded
in the statements of operations each period.
Transfers to/from Levels 1, 2, and 3 are recognized
at the end of the reporting period. For the periods ended June 30, 2024 and December 31, 2023, there were no transfers to/from any level.
The table below shows the change in fair value of the derivative warrant liabilities as of June 30, 2024 and 2023:
| |
Private Warrants | | |
Public Warrants | | |
Total | |
Fair value at January 1, 2024 | |
$ | 435,000 | | |
$ | 345,000 | | |
$ | 780,000 | |
Change in fair value | |
| (359,600 | ) | |
| (285,200 | ) | |
| (644,800 | ) |
Fair value as of June 30, 2024 | |
$ | 794,600 | | |
$ | 630,200 | | |
$ | 1,424,800 | |
| |
Private Warrants | | |
Public Warrants | | |
Total | |
Fair value at January 1, 2023 | |
$ | 1,305,000 | | |
$ | 1,035,000 | | |
$ | 2,340,000 | |
Change in fair value | |
| 632,200 | | |
| 501,400 | | |
| 1,133,600 | |
Fair value as of June 30, 2023 | |
$ | 672,800 | | |
$ | 533,600 | | |
$ | 1,206,400 | |
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations.
References in this report (the “Quarterly
Report”) to “we,” “us” or the “Company” refer to Patria Latin American Opportunity Acquisition
Corp. References to our “management” or our “management team” refer to our officers and directors, references
to the “Sponsor” refer to Patria SPAC LLC. The following discussion and analysis of the Company’s financial condition
and results of operations should be read in conjunction with the unaudited 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” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section
21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) 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 Form 10-Q 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 final prospectus for its Initial Public Offering filed with
the U.S. Securities and Exchange Commission (the “SEC”). 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 in Cayman
Islands on February 25, 2021. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
ordinary share purchase, reorganization or similar business combination with one or more businesses, or the “Business Combination.”
The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
On May 9, 2024 the Company received a
written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that since
the Company’s aggregate market value of its outstanding warrants was less than $1 million, the Company was no longer in
compliance with the Nasdaq Global Market continued listing criteria set forth in Listing Rule 5452(b)(C), which requires the Company
to maintain an aggregate market value of its outstanding warrants of at least $1 million (the “Notice”). The Notice
additionally indicated that the Company, pursuant to the Listing Rules, has 45 calendar days, or until June 24, 2024, to submit a
plan to regain compliance. The Company submitted a plan to regain compliance on July 31, 2024. As of the date of this report, the
Company has not received a response from Nasdaq. If Nasdaq accepts the Company’s plan, the Company will
have 180 calendar days from the date of the Notice, or until November 5, 2024, to evidence compliance. If Nasdaq were to reject the
Company’s plan, Nasdaq rules permit the Company to appeal the decision to a hearings panel.
Initial Business Combination
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the IPO, 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 80% of the net assets held in the Trust Account (as defined below) (excluding the amount of deferred underwriting commission
held in Trust and taxes payable on the income earned on the Trust Account) at the time of the agreement to enter into the initial Business
Combination. However, the Company only intends to complete a Business Combination if the post-business combination company owns or acquires
50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient
for it not to be required to register as an investment company under the Investment Company Act 1940, as amended (the “Investment
Company Act”). Upon the closing of the IPO, management has agreed that an amount equal to at least $10.30 per Unit sold in the IPO,
including the proceeds from the sale of the Private Placement Warrants, will be held in a trust account (“Trust Account”)
located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in United States
“government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days
or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest
only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business
Combination and (ii) the distribution of the Trust Account as described below. The Company will provide the holders (the “Public
Shareholders”) of the Company’s issued and outstanding Class A ordinary shares, par value $0.0001 per share, sold in the IPO
(the “Public Shares”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business
Combination either (i) in connection with a shareholder 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 Business Combination or conduct a tender offer will
be made by the Public Shares for a pro rata portion of the amount then held in the Trust Account. The per-share amount to be distributed
to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay
to the underwriters. If the Company seeks shareholder approval, the Company will proceed with a Business Combination if a majority of
the shares voted are voted in favor of the Business Combination. If a shareholder vote is not required by law and the Company does not
decide to hold a shareholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Articles
of Association (the “Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities
and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If,
however, shareholder approval of the transaction is required by law, or the Company decides to obtain shareholder approval for business
or legal reasons, the Company will offer to redeem the Public Shares in conjunction with a proxy solicitation pursuant to the proxy rules
and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business
Combination, the initial shareholders (as defined below) have agreed to vote their Founder Shares (as defined below) and any Public Shares
purchased during or after the IPO in favor of a Business Combination. In addition, the initial shareholders have agreed to waive their
redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination.
The Articles of Association will provide that
a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert
or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the Public Shares, without the prior consent
of the Company. The holders of the Founder Shares (the “initial shareholders”) have agreed not to propose an amendment to
the Articles of Association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection
with a Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination within the
Combination Period (as defined below) or (B) with respect to any other provision relating to shareholders’ rights or pre-initial
Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares
in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination within 42 months from the closing of the IPO (or September 14, 2025) and the Company’s shareholders have not amended
the Articles of Association to extend such Combination Period, the Company will (i) cease all operations except for the purpose of winding
up; (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor,
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 taxes, if any (less up to
$100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding Public Shares, which redemption will completely
extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any),
subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
shareholders and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman
law to provide for claims of creditors and the requirements of other applicable law.
The initial shareholders have agreed to waive
their rights to liquidating distributions from the Trust Account with respect to the Founder Shares if the Company fails to complete a
Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares after the IPO, they will
be entitled to liquidating distributions from the Trust if the Company fails to complete a Business Combination within the
The underwriters have agreed to waive their rights
to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination before
the Company’s termination date as described above, and in such event, such amounts will be included with the other funds held in
the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible
that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.30.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any
claims by a third party (except for 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 (a “Target”),
reduce the amount of funds in the Trust Account to below (i) $10.30 per unit or (ii) the lesser amount per Public Share held in the Trust
Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of
interest which may be withdrawn to pay taxes, provided that such liability will not apply to any claims by a third party or Target that
executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s
indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, our sponsor
will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that
the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers
(other than the Company’s independent registered public accounting firm), prospective target businesses or other entities with which
the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies
held in the Trust Account.
Results of Operations
We have neither engaged in any operations nor
generated any revenues to date. Our only activities from February 25, 2021 (inception) through June 30, 2024 were organizational activities,
those necessary to prepare for the Initial Public Offering, described below, and the Company’s search for a target business with
which to complete a Business Combination. We do not expect to generate any operating revenues until after the completion of our initial
Business Combination. We generate non-operating income in the form of realized gains on the investments held in the trust account. We
are incurring 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 June 30, 2024, we reported
net income of $2,048,967 which consists of change in fair value of derivative warrant liabilities of $135,200, realized gain on the investments
held in the trust account of $2,254,058, offset by interest on related party promissory note of $5,795, and general and administrative
expenses of $334,496 (made up of professional services fees of $189,578 and other general and administrative fees of $144,918).
For the three months ended June 30, 2023 we reported
net income of $3,408,179 which consists of change in fair value of derivative warrant liabilities of $1,144,000, realized gain on the
investments held in the trust account of $2,671,830 offset by general and administrative expenses of $407,651 (made up of professional
services fees of $174,878 and other general and administrative fees of $232,773).
For the six months ended June 30, 2024, we
reported net income of $3,469,437 which consists of realized gain on the investments held in the trust account of $4,690,197, offset
by change in fair value of derivative warrant liabilities of $644,800, interest on related party promissory note of $5,795, and
general and administrative expenses of $570,165 (made up of professional services fees of $280,404 and other general and
administrative fees of $289,761).
For the six months ended June 30, 2023 we reported
net income of $5,687,117 which consists of change in fair value of derivative warrant liabilities of $1,133,600, realized gain on the
investments held in the trust account of $5,241,005 offset by general and administrative expenses of $687,488 (made up of professional
services fees of $342,397 and other general and administrative fees of $345,091).
Liquidity and Going Concern Consideration
As of June 30, 2024, the Company had working capital of $42,461,028 including the Trust Account, deferred underwriting fees payable. Working
capital was $(4,402,190) when marketable securities held in Trust Account, deferred underwriting fees payable, and derivative warrant
liabilities were excluded from the calculation. Of the net proceeds from the IPO and associated sale of Private Placement Warrants, $236,900,000
of cash was placed in the Trust Account. The working capital surplus includes the amount of restricted marketable securities held in the
Trust Account, deferred underwriting fees payable and derivative warrant liabilities, all of which have been classified as current at
June 30, 2024. The Company’s ability to continue operations through the liquidation date is contingent on the payment of the monthly
extension deposit.
For the six months ended June 30, 2024, cash
used in operating activities was $513,372, which is made up of a net income of $3,469,437, changes in operating assets and
liabilities of $3,207. These amounts were offset by a gain on Investments held in the Trust account of $4,690,197, deemed
contribution for administrative support - related party of $60,000, interest on related party promissory note of $5,795, and change
in fair value of derivative warrant liabilities of $644,800. Cash of $23,645 was held outside of the Trust Account and is available
for the Company’s working capital purposes.
As of June 30, 2024, we had cash of $23,645. We
intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence
on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their
representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and
complete a Business Combination.
In order to finance transaction costs in connection
with an Initial Business Combination, the Company’s sponsor, or an affiliate of the sponsor or certain of the Company’s officers
and directors may, but are not obligated to, provide Working Capital Loans to the Company. As of June 30, 2024, there were no amounts
outstanding under any Working Capital Loans.
If the Company’s estimates of the costs
of identifying a target business, undertaking due diligence and negotiating an Initial Business Combination are less than the actual amount
necessary to do so, the Company may have insufficient funds available to operate its business prior to an Initial Business Combination.
Moreover, the Company may need to obtain additional financing either to complete an Initial Business Combination or because it becomes
obligated to redeem a significant number of its Public Shares upon completion of an Initial Business Combination, in which case the Company
may issue additional securities or incur debt in connection with such Initial Business Combination.
The Company anticipates that the cash held
outside of the Trust Account as of June 30, 2024 will not be sufficient to allow the Company to operate for at least the next 12
months from the issuance of the unaudited condensed financial statements, assuming that a Business Combination is not consummated
during that time. Over this time period, the Company will be using the funds held outside of the Trust Account for paying existing
accounts payable and accrued liabilities, 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 the Business Combination. These conditions raise substantial doubt about the
Company’s ability to continue as a going concern for a period of time within one year after the date that the unaudited
condensed financial statements are issued. Management plans to address this uncertainty through the Business Combination as
discussed above. In addition, 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 under the Working Capital Loans. There is no assurance that
the Company’s plans to consummate the Business Combination will be successful or successful within the Combination Period or
that the sponsor or an affiliate of the sponsor, or certain of the Company’s officers and directors will loan the Company
funds as may be required under the Working Capital Loans. We also deposited $300,000 monthly through June 14, 2024 (end date of the
first extension) and $68,121 starting July 14, 2024 (start date of the second extension) into the Trust Account to effect the
extension of the termination date and provide time for us to complete a business combination. As of June 30, 2024, we had deposited
$3,668,121 in aggregate in connection with these extensions as disclosed in Note 1 of the accompanying unaudited condensed financial
statements. This amount allowed us to extend the termination date through July 14, 2024. We made an aggregate subsequent deposit of
$136,242 on July 14, 2024 and August 9, 2024 into the Trust Account to extend the termination date through September 14, 2024.
The unaudited condensed financial statements do
not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary
should the Company be unable to continue as a going concern.
Commitments and Contractual Obligations
We do not have any long-term debt, capital lease
obligations, operating lease obligations or long-term liabilities.
The underwriters are entitled to a deferred fee
of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will be waived by the underwriters in the event that the Company does
not complete a Business Combination, subject to the terms of the underwriting agreement.
On December 4, 2023, the Company received an executed
deferred underwriting fees waiver letter from J.P. Morgan Securities LLC, one of the Company’s underwriters, informing the Company
of its decision to waive any entitlement it may have to its deferred underwriting fees payable held in the Trust Account in respect of
any Business Combination. The waiver does not cover deferred underwriting fees payable to Citigroup Global Market Inc. (representing 50%
of the total deferred underwriting fees payable, or $4,025,000).
Administrative Services Agreement
Following our IPO, the Company pays the Sponsor
or an affiliate a monthly fee of $10,000 for office space, utilities, secretarial and administrative services. In August 2023, the Company
and its Sponsor executed an agreement to discontinue the remittance of administrative fees to the Sponsor with an effective date of August
1, 2023. For the six months ended June 30, 2024 and 2023, we incurred $60,000 and $60,000 in administrative support fees respectively.
Registration Rights
The holders of Founder Shares and Private Placement
Warrants, including any that may be issued upon conversion of Working Capital Loans, if any (and any Class A ordinary shares issuable
upon the exercise of the Private Placement Warrants, including any that may be issued upon conversion of the Working Capital Loans), will
be entitled to registration rights pursuant to a registration rights agreement entered into prior to the consummation of the IPO. These
holders will be entitled to certain demand and “piggyback” registration rights. However, the registration rights agreement
provides that the Company is not required to effect or permit any registration or cause any registration statement to become effective
until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such
registration statements.
Critical Accounting Estimates
The preparation of the unaudited condensed financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the unaudited condensed financial statements, and income and expenses during the periods reported. Actual
results could materially differ from those estimates. We have not identified any critical accounting estimates.
Recent Accounting Standards
See “Recent Accounting Pronouncements”
in Note 2 of the accompanying unaudited condensed financial statements.
JOBS Act
The Jumpstart Our Business Startups Act of 2012
(the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public
companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which
adoption of such standards is required for non-emerging growth companies. As a result, the unaudited condensed financial statements may
not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating
the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to
Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank
Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory
audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the unaudited condensed
financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation
between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These
exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an
“emerging growth company,” whichever is earlier.
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.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed
with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report,
is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls
are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the
chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management
evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”),
the effectiveness of our disclosure controls and procedures as of June 30, 2024, pursuant to Rule 13a-15(b) under the Exchange Act. Based
upon that evaluation, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of June 30,
2024 due to the material weaknesses described below.
In the preparation of the Company’s annual
report for fiscal year 2023, we identified errors in the presentation and disclosure of earnings per share related to the waived deferred
underwriter fees and the calculation of weighted average number of shares outstanding, Class A ordinary shares subject to possible redemption
and related accretion, certain supplemental disclosures on the statement of cash flows and certain disclosures in the financial statements
related to comparative information, as well as incomplete disclosures in the Results of Operations, Liquidity and Capital Resources and
Critical Accounting Policies sections in Management’s Discussion and Analysis of Financial Condition and Results of Operations.
These errors were corrected in the financial statements attached to our annual report on Form 10-K for the year ended December 31, 2023.
As part of such process, management concluded that material weaknesses in internal control over financial reporting existed related to
the process of presentation and disclosure. A material weakness is a deficiency, or combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim
financial statements will not be prevented or detected on a timely basis.
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.
In light of these material weaknesses, we plan
to enhance our presentation and disclosure controls. Our plans currently include extensive research on complex accounting topics and training
of management personnel. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these
initiatives will ultimately have the intended effects.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control
over financial reporting (as such term is defined in Rules 13a- 15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal
quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER
INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Factors that could cause our actual results to
differ materially from those in this report include the risk factors described in in the Company’s annual report on Form 10-K as
filed with the SEC on April 1, 2024. As of the date of this Report, there have been no material changes to the risk factors disclosed
in our form 10-K filed with the SEC, except as described below.
We may in the future not be compliant
with all of Nasdaq’s continued listing standards and our Public Warrants could be delisted.
On May 9, 2024 the Company received a
written notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that since
the Company’s aggregate market value of its outstanding warrants was less than $1 million, the Company was no longer in
compliance with the Nasdaq Global Market continued listing criteria set forth in Listing Rule 5452(b)(C), which requires the Company
to maintain an aggregate market value of its outstanding warrants of at least $1 million (the “Notice”). The Notice
additionally indicated that the Company, pursuant to the Listing Rules, has 45 calendar days, or until June 24, 2024, to submit a
plan to regain compliance. The Company submitted a plan to regain compliance on July 31, 2024. As of the date of this report, the
Company has not received a response from Nasdaq. If Nasdaq accepts the Company’s plan, the Company will
have 180 calendar days from the date of the Notice, or until November 5, 2024, to evidence compliance. If Nasdaq were to reject the
Company’s plan, Nasdaq rules permit the Company to appeal the decision to a hearings panel.
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
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing
under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
PATRIA LATIN AMERICAN OPPORTUNITY ACQUISITION CORP. |
|
|
Date: August 14, 2024 |
By: |
/s/ José Augusto Gonçalves de Araújo Teixeira |
|
|
Name: |
José Augusto Gonçalves de Araújo Teixeira |
|
|
Title: |
Chief Executive Officer |
29
00-0000000
KY
14575382
15727932
21722298
22357620
0.15
0.16
0.25
0.27
5750000
5750000
5750000
5750000
0.01
0.02
0.04
0.13
14575382
21722298
5750000
5750000
0.02
0.04
0.15
0.16
15727932
22357620
5750000
5750000
0.01
0.13
0.25
0.27
false
--12-31
Q2
0001849737
0001849737
2024-01-01
2024-06-30
0001849737
plao:UnitsEachConsistingOfOneClassAOrdinaryShare00001ParValueAndOnehalfOfOneRedeemableWarrantMember
2024-01-01
2024-06-30
0001849737
plao:ClassAOrdinarySharesIncludedAsPartOfTheUnitsMember
2024-01-01
2024-06-30
0001849737
plao:RedeemableWarrantsIncludedAsPartOfTheUnitsEachWholeWarrantExercisableForOneClassAOrdinaryShareAtAnExercisePriceOf1150Member
2024-01-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
2024-08-14
0001849737
us-gaap:CommonClassBMember
2024-08-14
0001849737
2024-06-30
0001849737
2023-12-31
0001849737
us-gaap:RelatedPartyMember
2024-06-30
0001849737
us-gaap:RelatedPartyMember
2023-12-31
0001849737
us-gaap:CommonClassAMember
2024-06-30
0001849737
us-gaap:CommonClassAMember
2023-12-31
0001849737
us-gaap:CommonClassBMember
2024-06-30
0001849737
us-gaap:CommonClassBMember
2023-12-31
0001849737
2024-04-01
2024-06-30
0001849737
2023-04-01
2023-06-30
0001849737
2023-01-01
2023-06-30
0001849737
us-gaap:CommonClassAMember
2024-04-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
2023-04-01
2023-06-30
0001849737
us-gaap:CommonClassAMember
2024-01-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
2023-01-01
2023-06-30
0001849737
plao:ClassBNonRedeemableOrdinarySharesMember
2024-04-01
2024-06-30
0001849737
plao:ClassBNonRedeemableOrdinarySharesMember
2023-04-01
2023-06-30
0001849737
plao:ClassBNonRedeemableOrdinarySharesMember
2024-01-01
2024-06-30
0001849737
plao:ClassBNonRedeemableOrdinarySharesMember
2023-01-01
2023-06-30
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2023-12-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2023-12-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2023-12-31
0001849737
us-gaap:RetainedEarningsMember
2023-12-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2024-01-01
2024-03-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2024-01-01
2024-03-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2024-01-01
2024-03-31
0001849737
us-gaap:RetainedEarningsMember
2024-01-01
2024-03-31
0001849737
2024-01-01
2024-03-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2024-03-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2024-03-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2024-03-31
0001849737
us-gaap:RetainedEarningsMember
2024-03-31
0001849737
2024-03-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2024-04-01
2024-06-30
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2024-04-01
2024-06-30
0001849737
us-gaap:AdditionalPaidInCapitalMember
2024-04-01
2024-06-30
0001849737
us-gaap:RetainedEarningsMember
2024-04-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2024-06-30
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2024-06-30
0001849737
us-gaap:AdditionalPaidInCapitalMember
2024-06-30
0001849737
us-gaap:RetainedEarningsMember
2024-06-30
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2022-12-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2022-12-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2022-12-31
0001849737
us-gaap:RetainedEarningsMember
2022-12-31
0001849737
2022-12-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2023-01-01
2023-03-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2023-01-01
2023-03-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2023-01-01
2023-03-31
0001849737
us-gaap:RetainedEarningsMember
2023-01-01
2023-03-31
0001849737
2023-01-01
2023-03-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2023-03-31
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2023-03-31
0001849737
us-gaap:AdditionalPaidInCapitalMember
2023-03-31
0001849737
us-gaap:RetainedEarningsMember
2023-03-31
0001849737
2023-03-31
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2023-04-01
2023-06-30
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2023-04-01
2023-06-30
0001849737
us-gaap:AdditionalPaidInCapitalMember
2023-04-01
2023-06-30
0001849737
us-gaap:RetainedEarningsMember
2023-04-01
2023-06-30
0001849737
us-gaap:CommonClassAMember
plao:OrdinarySharesSubjectToPossibleRedemptionMember
2023-06-30
0001849737
us-gaap:CommonClassBMember
us-gaap:CommonStockMember
2023-06-30
0001849737
us-gaap:RetainedEarningsMember
2023-06-30
0001849737
2023-06-30
0001849737
us-gaap:WarrantMember
2024-05-09
0001849737
2024-05-09
0001849737
us-gaap:IPOMember
2022-03-14
2022-03-14
0001849737
us-gaap:OverAllotmentOptionMember
2022-03-14
2022-03-14
0001849737
us-gaap:CommonClassAMember
us-gaap:IPOMember
2024-01-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
us-gaap:IPOMember
2024-06-30
0001849737
us-gaap:WarrantMember
us-gaap:IPOMember
2022-03-14
2022-03-14
0001849737
us-gaap:CommonClassAMember
us-gaap:IPOMember
2022-03-14
2022-03-14
0001849737
us-gaap:CommonClassAMember
2022-03-14
0001849737
2022-03-14
0001849737
2022-03-14
2022-03-14
0001849737
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
plao:SponsorMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:PrivatePlacementMember
2024-01-01
2024-06-30
0001849737
us-gaap:IPOMember
2022-03-14
0001849737
us-gaap:PrivatePlacementMember
2022-03-14
2022-03-14
0001849737
us-gaap:CommonClassAMember
2023-06-14
2023-06-14
0001849737
plao:ExtraordinaryGeneralMeetingMember
us-gaap:CommonClassAMember
2023-06-12
0001849737
us-gaap:CommonClassAMember
2023-06-12
0001849737
2023-06-12
0001849737
2023-06-12
2023-06-12
0001849737
2023-07-14
0001849737
2024-08-09
0001849737
2023-01-01
2023-12-31
0001849737
plao:InitialBusinessCombinationMember
2024-06-30
0001849737
us-gaap:IPOMember
2024-06-30
0001849737
plao:BusinessCombinationMember
2024-01-01
2024-06-30
0001849737
us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember
2024-06-30
0001849737
us-gaap:CommonClassBMember
2024-04-01
2024-06-30
0001849737
us-gaap:CommonClassBMember
2023-04-01
2023-06-30
0001849737
plao:ClassATemporaryEquityMember
2024-01-01
2024-06-30
0001849737
us-gaap:CommonClassBMember
2024-01-01
2024-06-30
0001849737
plao:ClassATemporaryEquityMember
2023-01-01
2023-06-30
0001849737
us-gaap:CommonClassBMember
2023-01-01
2023-06-30
0001849737
us-gaap:IPOMember
2024-01-01
2024-06-30
0001849737
us-gaap:OverAllotmentOptionMember
2024-01-01
2024-06-30
0001849737
us-gaap:CommonClassAMember
2023-06-12
2023-06-12
0001849737
us-gaap:CommonClassBMember
2023-06-12
0001849737
2024-06-14
2024-06-14
0001849737
2024-06-14
0001849737
us-gaap:CommonClassAMember
2024-06-14
0001849737
us-gaap:CommonClassBMember
2024-06-14
0001849737
plao:SponsorMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:CommonClassAMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
plao:FounderSharesMember
2021-03-03
2021-03-03
0001849737
plao:SponsorMember
plao:FounderSharesMember
2022-02-28
2022-02-28
0001849737
plao:SponsorMember
plao:FounderSharesMember
2022-03-09
0001849737
plao:FounderSharesMember
2024-01-01
2024-06-30
0001849737
2022-03-31
2022-03-31
0001849737
plao:SponsorMember
us-gaap:CommonClassAMember
2024-06-30
0001849737
plao:SponsorMember
plao:FounderSharesMember
2024-01-01
2024-06-30
0001849737
plao:PromissoryNoteRelatedPartyMember
2021-03-03
0001849737
plao:PromissoryNoteRelatedPartyMember
2022-01-31
2022-01-31
0001849737
plao:PromissoryNoteRelatedPartyMember
2022-01-31
0001849737
plao:PromissoryNoteRelatedPartyMember
2021-12-31
0001849737
plao:PromissoryNoteRelatedPartyMember
2024-01-01
2024-06-30
0001849737
plao:PromissoryNoteRelatedPartyMember
2023-01-01
2023-12-31
0001849737
plao:PromissoryNoteAgreementMember
2024-06-12
0001849737
plao:PromissoryNoteRelatedPartyOneMember
2024-01-01
2024-06-30
0001849737
us-gaap:RelatedPartyMember
2024-06-30
0001849737
us-gaap:RelatedPartyMember
2023-12-31
0001849737
plao:SponsorMember
2024-01-01
2024-06-30
0001849737
us-gaap:IPOMember
plao:UnderwritingAgreementMember
2024-01-01
2024-06-30
0001849737
plao:UnderwritingAgreementMember
2024-01-01
2024-06-30
0001849737
2023-12-04
2023-12-04
0001849737
plao:PublicWarrantsMember
2024-06-30
0001849737
plao:PrivatePlacementWarrantsMember
2024-06-30
0001849737
us-gaap:WarrantMember
2024-01-01
2024-06-30
0001849737
us-gaap:WarrantMember
us-gaap:CommonClassAMember
2024-06-30
0001849737
us-gaap:WarrantMember
2024-06-30
0001849737
plao:PublicWarrantsMember
2024-01-01
2024-06-30
0001849737
plao:InitialBusinessCombinationMember
2024-01-01
2024-06-30
0001849737
plao:RedemptionOfWarrantsMember
2024-01-01
2024-06-30
0001849737
plao:WarrantExercisePriceExceedEighteenPointZeroMember
2024-01-01
2024-06-30
0001849737
plao:WarrantExercisePriceExceedEighteenPointZeroMember
us-gaap:CommonClassAMember
2024-06-30
0001849737
plao:WarrantExercisePriceExceedEighteenPointZeroMember
us-gaap:CommonClassAMember
2024-01-01
2024-06-30
0001849737
plao:WarrantExercisePriceExceedTenPointZeroZeroMember
2024-01-01
2024-06-30
0001849737
plao:WarrantExercisePriceExceedTenPointZeroZeroMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2024-06-30
0001849737
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
2024-06-30
0001849737
us-gaap:FairValueMeasurementsRecurringMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2024-06-30
0001849737
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2023-12-31
0001849737
us-gaap:FairValueMeasurementsRecurringMember
plao:MarketableSecuritiesHeldInTrustAccountMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
2023-12-31
0001849737
us-gaap:FairValueMeasurementsRecurringMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2023-12-31
0001849737
us-gaap:FairValueMeasurementsRecurringMember
plao:PublicWarrantsMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel1Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel2Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2023-12-31
0001849737
us-gaap:FairValueInputsLevel3Member
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2023-12-31
0001849737
us-gaap:FairValueMeasurementsRecurringMember
us-gaap:PrivatePlacementMember
2023-12-31
0001849737
us-gaap:PrivatePlacementMember
2023-12-31
0001849737
plao:PublicWarrantsMember
2023-12-31
0001849737
us-gaap:PrivatePlacementMember
2024-01-01
2024-06-30
0001849737
plao:PublicWarrantsMember
2024-01-01
2024-06-30
0001849737
us-gaap:PrivatePlacementMember
2024-06-30
0001849737
plao:PublicWarrantsMember
2024-06-30
0001849737
us-gaap:PrivatePlacementMember
2022-12-31
0001849737
plao:PublicWarrantsMember
2022-12-31
0001849737
us-gaap:PrivatePlacementMember
2023-01-01
2023-06-30
0001849737
plao:PublicWarrantsMember
2023-01-01
2023-06-30
0001849737
us-gaap:PrivatePlacementMember
2023-06-30
0001849737
plao:PublicWarrantsMember
2023-06-30
xbrli:shares
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:pure
In connection with the Quarterly Report of Patria Latin American Opportunity
Acquisition Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, José Augusto Gonçalves de Araújo Teixeira, 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 my knowledge:
In connection with the Quarterly Report of Patria Latin American Opportunity
Acquisition Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, Ana Cristina Russo, Chief Financial 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 my knowledge: