Form 10-Q Disruptive Acquisition For: Jun 30
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2022
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to .
Commission File Number 001-40279
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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(Address of Principal Executive Offices)
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Zip Code
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Registrant’s telephone number, including area code: +1 424 -205-6858
Securities registered pursuant to Section 12(b) of the Act:
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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.
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Large accelerated filer
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Accelerated filer
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Smaller reporting company
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Emerging growth company
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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 19, 2022, 27,500,000 Class A ordinary shares, par value
$0.0001 per share, and 6,875,000 Class B ordinary shares, par value $0.0001 per share, were issued and outstanding, respectively.
DISRUPTIVE ACQUISITION CORPORATION I
Form 10-Q
For the Quarter Ended June 30, 2022
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Page
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1
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1
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29
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| 30 |
| Item 1. |
Financial Statements
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June 30,
2022 |
December 31,
2021 |
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| (Unaudited) |
(Audited) |
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Assets
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Current assets:
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Cash
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$
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$
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Prepaid expenses
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Total current assets
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Prepaid expenses – non-current
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Marketable securities held in trust account
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Total assets
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$
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$
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Liabilities, redeemable ordinary shares and shareholders’ deficit
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Current liabilities:
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Accounts payable and accrued expenses
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$
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$
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| Advance from related party |
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| Promissory note – related party |
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Total current liabilities
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Warrant liabilities
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Deferred underwriting discount
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Total liabilities
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Commitments and contingencies (See Note 7)
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Class A ordinary shares subject to possible redemption,
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Shareholders’ deficit:
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Preference shares, $
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Class A ordinary shares, $
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Class B ordinary shares, $
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Additional paid-in capital
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Accumulated deficit
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(
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)
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(
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)
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Total shareholders’ deficit
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(
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)
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(
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)
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Total liabilities, redeemable ordinary shares and shareholders’ deficit
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$
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$
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See accompanying notes to the condensed financial statements.
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For the three months ended
June 30,
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For the six months ended
June 30,
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2022
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2021
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2022
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2021
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Formation and operating costs
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$ |
$
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$ |
$
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Loss from operations
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(
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)
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(
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)
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(
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)
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(
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)
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Other income:
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Dividend earned on trust account
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Change in fair value of warrant liabilities
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Offering expenses related to warrant issuance
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(
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)
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Total other income, net
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Net income
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$ |
$
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$ |
$
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Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
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Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
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$ |
$
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$ |
$
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Basic and diluted weighted average shares outstanding, Class B ordinary shares
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Basic and diluted net income per share, Class B ordinary shares
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$ |
$
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$ |
$
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DISRUPTIVE ACQUISITION CORPORATION I
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED)
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Ordinary Shares
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Class A
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Class B
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Additional |
Accumulated
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Total
Shareholders’
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Shares
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Amount
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Shares
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Amount
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Paid-In Capital
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Deficit
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Deficit
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Balance as of December 31, 2021 (Audited)
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$
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$
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$
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$
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(
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$
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(
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Net income
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—
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—
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Balance as of March 31, 2022
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(
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(
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Remeasurement adjustment value of Class A to redemption value
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— |
— |
— | — |
( |
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| Net income | — | — | ||||||||||||||||||||||||||
| Balance as of June 30, 2022 | $ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||||||||||
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Ordinary Shares
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Class A
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Class B
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Additional |
Accumulated
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Total
Shareholders’
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Shares
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Amount
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Shares
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Amount
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Paid-In Capital
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Deficit
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Deficit
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Balance as of December 31, 2020 (Audited)
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$
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$
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$
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$
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(
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)
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$
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| Private placement warrants | — | — | ||||||||||||||||||||||||||
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Measurement adjustment value of Class A to redemption value
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—
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— |
— |
—
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(
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(
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(
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Net loss
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—
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—
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(
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(
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| Balance as of March 31, 2021 | ( |
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Forfeiture of founder shares pursuant to expiration of over-allotment option
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( |
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Initial value of over-allotment private warrant liabilities
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— |
— |
— |
— |
( |
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Measurement adjustment value of Class A to redemption value
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— | — | — | — | ( |
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| Net income | — | — | ||||||||||||||||||||||||||
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Balance as of June 30, 2021
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$
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$
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$
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$
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(
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)
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$
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(
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)
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See accompanying notes to the condensed financial statements.
DISRUPTIVE ACQUISITION CORPORATION I
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED)
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For the six months ended
June 30,
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| 2022 |
2021
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Cash Flows from Operating Activities:
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Net income
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$ | $ | ||||||
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Adjustments to reconcile net income to net cash used in operating activities:
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| Dividend earned on trust account | ( |
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Change in fair value of warrant liability
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( |
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(
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Offering costs allocated to warrants
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Changes in current assets and current liabilities:
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Prepaid expenses
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(
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)
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Accounts payable and accrued expenses
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Net cash used in operating activities
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( |
) |
(
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)
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Cash Flows from Investing Activities:
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Investment of cash into trust account
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(
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)
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Net cash used in investing activities
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(
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)
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Cash Flows from Financing Activities:
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Proceeds from initial public offering, net of underwriters’ discount
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| Proceeds of sale of option units to underwriters | ||||||||
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Proceeds from issuance of private placement warrants
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| Proceeds from advance from related party |
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| Proceeds from issuance of promissory note |
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| Repayment of debt to related party |
( |
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Payments of offering costs
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(
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Net cash provided by financing activities
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Net Change in Cash
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( |
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Cash - Beginning
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Cash - Ending
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$ | $ | ||||||
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Supplemental disclosure of non-cash financing activities:
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Initial value of Class A Ordinary Shares subject to possible redemption
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$ | $ | ||||||
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Remeasurement adjustment value of Class A ordinary shares to redemption value
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$ | $ | ||||||
| Initial value of warrant liabilities | $ | $ | ||||||
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Deferred offering costs paid by sponsor in exchange for founder shares
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$ | $ | ||||||
See accompanying notes to the condensed financial statements.
Note 1 — Organization, Business Operations and Going Concern
Organization and General
Disruptive Acquisition Corporation I (the “Company”) was incorporated as a Cayman Islands exempted company on December 29, 2020. The Company was incorporated
for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not selected any specific
Business Combination target and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to the Business Combination.
As of June 30, 2022, the Company had not yet commenced any operations. All activity through June 30, 2022 relates to the Company’s formation and its initial public
offering (the “Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company expects to generate
non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
Financing
The registration statement for the Company’s Initial Public Offering was declared effective on March 23, 2021 (the “Effective Date”). On March 26, 2021, the
Company consummated the Initial Public Offering of 25,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (the “Class A Ordinary Shares”), and of one redeemable warrant of the Company (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50 per share. The Units
were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $250,000,000 .
Substantially concurrently with the closing of the Initial Public Offering, the Company completed the private sale (the “Private Placement”)
of 4,666,667 warrants (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”) to Disruptive Acquisition Sponsor I, LLC (the “Sponsor”) at a purchase price of $1.50
per Private Placement Warrant, generating gross proceeds to the Company of $7,000,000 .
In connection with the Initial Public Offering, the underwriters were granted a 45 -day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 3,750,000 additional units to cover over-allotments (the “Option Units”), if any. On May 5, 2021, the underwriters purchased an additional 2,500,000 Option Units pursuant to the partial exercise of the Over-Allotment Option. The Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $25,000,000 . Also in connection with the partial exercise of the Over-Allotment Option, the Sponsor purchased an additional 333,333 Private Placement Warrants at a purchase price of $1.50 per Warrant,
generating gross proceeds to the Company of $500,000 .
Trust Account
Following the closing of the Initial Public Offering on March 26, 2021, an
amount of $250,000,000 from the net proceeds of the sale of the Units in the Initial Public
Offering has been placed in a trust account (the “Trust Account”). On May 6, 2021, in connection with the partial exercise of the Over-Allotment Option, an additional $25,000,000 from the net proceeds of the sale of the Option Units was placed in the Trust Account, for an aggregate of $275,000,000 of net proceeds placed in the Trust Account. The proceeds are invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations, the
proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (a)
the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the
redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from
the closing of the Initial Public Offering, subject to applicable law. 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.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering, although substantially all of the net proceeds are intended to be generally applied toward consummating a business combination.
The Company must complete one
or more initial Business Combinations having an aggregate fair market value of at least 80 % of the assets held in the Trust Account
(excluding the deferred underwriting discount and taxes payable) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post transaction company owns or acquires 50 % or more of the 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. There is no assurance that the Company will be able to complete a Business Combination successfully.
Upon the closing of the Initial Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Initial Public Offering, including the proceeds of the Private Placement
Warrants, will be held in the Trust Account and will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which
invest only in direct U.S. government treasury obligations. The Company will not be permitted to withdraw any of the principal or interest held in the Trust Account, except for the withdrawal of interest to pay the Company’s taxes and up to $100,000 to pay dissolution expenses, as applicable, if any, until the earliest of (i) the completion of the initial Business Combination, (ii) the
redemption of the public shares if the Company is unable to complete the initial Business Combination within 24 months from the
closing of the Initial Public Offering (as such period may be extended pursuant to a shareholder vote, the “Combination Period”), subject to applicable law, or (iii) the redemption of the public
shares properly submitted in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to 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 Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A Ordinary Shares upon the completion of the initial
Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the Trust Account calculated as of business days prior to the consummation of the initial Business Combination,
including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the taxes, divided by the number of then outstanding public shares. The amount in the Trust Account is initially anticipated to be
$10.00 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be
reduced by the deferred underwriting discount the Company will pay to the underwriters of the Initial Public Offering.
The Class A ordinary shares subject to redemption are recorded at a redemption value and were classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such
case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such
consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company will have 24 months from the closing of
the Initial Public Offering (as the same may be extended pursuant to a shareholder vote) to complete the initial Business Combination. However, if the Company is unable to complete the initial Business
Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account (less tax payable and up to $100,000 of interest to pay dissolution expenses)
divided by the number of 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 Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii),
to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law.
The Sponsor, officers and directors have agreed, pursuant to a letter agreement with the Company, to (i) waive their redemption rights with respect to their Founder
Shares (as described in Note 6) and public shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder
vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or
to redeem 100 % of its public shares if the Company has not consummated an 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; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares
if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails
to complete the initial Business Combination within the Combination Period and (iv) vote any Founder Shares held by them and any public shares purchased during or after the Initial Public Offering
(including in open market and privately-negotiated transactions) in favor of the initial Business Combination.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than Marcum LLP, the Company’s independent
auditor) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement,
reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per
public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to
reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust
Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor
has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations.
None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Liquidity and Going Concern
As of June 30, 2022, the Company had cash outside the Trust Account of $28,668
available for working capital needs. All remaining cash held in the Trust Account are generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem
ordinary shares. As of June 30, 2022, none of the amount in the Trust Account was available to be withdrawn as described above.
Until the
consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for
travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company will need to raise additional capital through loans or additional investments from its Sponsor,
shareholders, officers, directors, or third parties. The Company’s Sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole
discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve
liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.
On
November 15, 2021, the Company issued an unsecured promissory note (the “Note”) in the amount of up to $250,000 to an
affiliate of the Sponsor. The proceeds of the Note, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be used for general working capital purposes. The Note bears no interest and is
payable in full upon the earlier to occur of (i) (24 ) months from the closing of the Initial Public Offering (or such later date as may be extended in accordance with the terms of the Company’s amended and restated memorandum and
articles of association) or (ii) the consummation of the initial Business Combination. A failure to pay the principal within
business days of the date specified above or the commencement of a voluntary or involuntary bankruptcy action shall be deemed an event of default, in which case the Note may be accelerated. On April 12, 2022, the Company amended and restated the Note in its entirety to increase
the Note’s principal amount to $500,000 . As of June 30, 2022 and December 31, 2021, the Company had $500,000 and $77,000 borrowings
outstanding under the Note. On
August 18, 2022, the Company further amended and restated the Note in its entirety to increase the Note’s principal amount to $750,000 .
The Company intends to increase the principal of the Note in future periods to alleviate liquidity concerns, if necessary.
If the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating a Business Combination are less than the
actual amounts necessary to do so, the Company may have insufficient funds available to operate its business prior to the consummation of its Business Combination and may need to raise additional capital, e.g., through loans from its Sponsor,
officers, directors or third parties. If the Company is unable to raise additional capital, it may be required to take additional measures to preserve liquidity, which could include, but not necessarily be limited to, curtailing operations,
suspending the pursuit of its business plan and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. The Company cannot assure you that
its plans to raise capital or to consummate an initial Business Combination before March 26, 2023 (absent any extensions of such period with shareholder approval) will be successful.
In addition, the
Company only has 24 months from the closing of the Initial Public Offering (as such period may be extended pursuant to a shareholder
vote) to complete its initial Business Combination. If the Company has not completed its initial Business Combination within this Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible, but not more than business days thereafter, redeem the Public Shares at a per-share price,
payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses), divided by the number of 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 Company’s
remaining shareholders and its board of directors, liquidate and dissolve, and subject to the Company’s obligations under Cayman Islands law, in the case of clauses (ii) and (iii), provide for claims of creditors and in all cases subject to the
other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company does not complete its initial Business Combination within
the Combination Period.
In connection with
the Company’s assessment of going concern considerations in accordance with ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until March 26, 2023 (absent any extensions of
such period with shareholder approval) to consummate its initial Business Combination. It is uncertain that the Company will be able to consummate its initial Business Combination by this time. If a Business Combination is not consummated by
this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the potential liquidity constraints in addition to the mandatory liquidation, should a Business Combination not occur, and potential
subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March
26, 2023. The Company intends to complete its initial Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by March 26, 2023.
Risks and Uncertainties
Management is
currently evaluating the impact of the COVID-19 pandemic and Russia-Ukraine war on the industry, and has concluded that while it is reasonably possible that the virus and the war could have a negative effect on the Company’s financial
position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Note 2 — Revision of Previously Issued Financial Statements
The Company
notes that the basic and diluted weighted average shares outstanding and earnings per share for both Class A ordinary shares and Class B ordinary shares for the three months ended March 31, 2021, the three and six months ended June 30,
2021, and the nine months ended September 30, 2021 were not restated correctly due to a calculation error within the restatement note of the September 30, 2021 Form 10-Q filed on November 15, 2021. The Company has included this revision
note to revise the previously restated and reported balances of basic and diluted weighted average shares outstanding and earnings per share of Class A ordinary shares and basic and diluted weighted average shares outstanding of Class B
ordinary shares within the Statement of Operations for these aforementioned periods.
There has
been no change in the Company’s total assets, liabilities, equity or operating results.
The impact
of the revision on the Company’s financial statements is reflected in the following table:
|
As Previously
Reported
|
Adjustment
|
As Restated
|
||||||||||
|
Statement of Operations for the three months ended March 31, 2021
|
||||||||||||
|
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
|
|
(
|
)
|
|
||||||||
|
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
Basic and diluted net income per share, Class B ordinary shares
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||
|
As Previously Reported
|
Adjustment
|
As Restated
|
||||||||||
|
Statement of Operations for the three and six months ended June 30, 2021
|
|
|||||||||||
|
Three months ended June 30, 2021
|
|
|||||||||||
|
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
|
|
(
|
)
|
|
||||||||
|
Basic and diluted weighted average shares outstanding, Class B ordinary shares
|
( |
) | ||||||||||
|
Six months ended June 30, 2021
|
||||||||||||
|
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
|
( |
) | ||||||||||
|
Basic and diluted weighted average shares outstanding, Class B ordinary shares
|
||||||||||||
|
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
|
$ | $ | ( |
) | $ | |||||||
|
Basic and diluted net income per share, Class B ordinary shares
|
$ | $ | ( |
) | $ | |||||||
|
As Previously
Reported
|
Adjustment
|
As Restated
|
||||||||||
|
Statement of Operations for the nine months ended September 30, 2021
|
||||||||||||
|
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption
|
|
(
|
)
|
|
||||||||
|
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
|
$
|
|
$
|
|
$
|
|
||||||
|
Basic and diluted net income per share, Class B ordinary shares
|
$
|
|
$
|
|
$
|
|
||||||
Note 3 — Significant Accounting Policies
Basis of Presentation
The accompanying
unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”). Certain information or footnote disclosures normally included in unaudited condensed financial statements prepared in accordance with
GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial
position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair
presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying
unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on April 13, 2022, which contains the audited financial statements
and notes thereto. The interim results for the six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.
Emerging
Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the
“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial
accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The
Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can
adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging
growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Accordingly, actual results
could differ 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.
Marketable Securities Held in Trust Account
At June 30, 2022 and December 31, 2021, the Trust Account had $275,417,074
and $275,018,013 held in marketable securities, respectively. All of the Company’s investments held in the Trust Account are
classified as trading securities. Trading securities are presented on the accompanying condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in
the Trust Account are included in interest earned on marketable securities held in the Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined
using available market information.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times,
may exceed the Federal Depository Insurance Coverage of $250,000. At June 30, 2022 and December 31, 2021, the Company has not experienced losses on this account.
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 Topic 480 “Distinguishing Liabilities
from Equity.” Class A Ordinary Shares are subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature
redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary
shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly,
as of June 30, 2022 and December 31, 2021, 27,500,000
Net Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A Ordinary Shares and Class B Ordinary Shares. Earnings and losses are shared pro rata
between the two classes of shares. The 27,500,000
|
For the three months ended
June 30, 2022
|
For the six months
ended
June 30, 2022
|
|||||||||||||||
|
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||
|
Basic and diluted net income per share:
|
||||||||||||||||
|
Numerator:
|
||||||||||||||||
|
Allocation of net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average shares outstanding
|
|
|
|
|
||||||||||||
|
Basic and diluted net income per share
|
$
|
|
$
|
|
$ |
$
|
|
|||||||||
|
For the three months ended
June 30, 2021
|
For the six months
ended
June 30, 2021
|
|||||||||||||||
|
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||
|
Basic and diluted net income per share:
|
||||||||||||||||
|
Numerator:
|
||||||||||||||||
|
Allocation of net income
|
$
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|||||
|
Denominator:
|
||||||||||||||||
|
Weighted-average shares outstanding
|
|
|
|
|
||||||||||||
|
Basic and diluted net income per share
|
$
|
|
$
|
|
$ |
$
|
|
|
||||||||
Offering Costs
The Company complies with the requirements of the ASC
340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A – “Expenses of Offering.” Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the
Initial Public Offering and that were charged to temporary equity upon the completion of the Initial Public Offering. Accordingly, for the year ended December 31, 2021, offering costs totaling $15,759,367 were charged to temporary equity (consisting of $5,500,000
of underwriting fee, $9,625,000 of deferred underwriting fee and $634,637 of other offering costs). Of the total transaction cost, $634,367
was reclassed to expense as a non-operating expense in the statements of operations with the rest of the offering cost charged to temporary equity for the year ended December 31, 2021. The transaction costs were allocated based on the
relative fair value basis, compared to the total offering proceeds, between the fair value of the public warrant liabilities and the Class A Ordinary Shares.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,”
approximates the carrying amounts represented in the balance sheet.
Derivative Warrant Liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial
instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its 14,166,667 ordinary
share warrants issued in connection with the Initial Public Offering 8,333,333 , Private
Placement 4,666,667 , and partial exercise of the Over-Allotment Option 1,166,667 as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and
adjusts the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statements of operations. The
fair value of warrants issued by the Company in connection with the Initial Public Offering, Private Placement and partial exercise of the Over-Allotment Option has been estimated using Monte-Carlo simulations at each measurement date.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes,” which 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 major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2022 and December
31, 2021, there were no no
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income
taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero
for the period presented.
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 is currently not aware of any issues under review that could
result in significant payments, accruals or material deviation from its position.
Recent Accounting Standards
Management does not believe that any recently issued,
but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements, other than as discussed below.
In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20)
and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash
conversion features from convertible instruments, and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for
convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all
convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if
any, it would have on its financial position, results of operations or cash flows.
Note 4 — Initial Public Offering
Pursuant to the Initial Public Offering, the Company sold 25,000,000
Units, at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share, par value $0.0001 per share and of one Public Warrant. Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share.
In connection with the Initial Public Offering, the underwriters were granted a 45 -day
option from the date of the prospectus to purchase up to 3,750,000 additional units to cover over-allotments, if any. On May 5, 2021,
the underwriters purchased an additional 2,500,000 Option Units pursuant to the partial exercise of the Over-Allotment Option. The
Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $25,000,000 .
The aggregate number of Units outstanding as a result of the Initial Public Offering and the partial exercise of
the Over-Allotment Option is 27,500,000 and the aggregate gross proceeds are $275,000,000 .
All of the 27,500,000 Class A ordinary shares sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the
redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s certificate
of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary share subject
to redemption to be classified outside of permanent equity.
The Class A ordinary shares are
subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99. If it is probable that the equity instrument will become redeemable, the Company has the option to either accrete changes in
the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or to recognize changes in the
redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The Company recognizes changes in redemption value immediately as they occur.
Immediately upon the closing of the IPO, the Company recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable ordinary share resulted in charges against additional paid-in
capital and accumulated deficit.
As of June 30, 2022 and December 31, 2021, the ordinary shares reflected on the balance sheet are reconciled in the following table:
|
Gross proceeds from IPO
|
$
|
|
||
|
Less:
|
||||
|
Proceeds allocated to Public Warrants
|
(
|
)
|
||
|
Ordinary shares issuance costs
|
(
|
)
|
||
|
Plus:
|
||||
|
Measurement of carrying value to redemption value
|
|
|||
| Contingently redeemable ordinary shares at December 31, 2021 | $ | |||
| Plus: | ||||
| Re-measurement of carrying value to redemption value | ||||
|
Contingently redeemable ordinary shares
|
$
|
|
Note 5 — Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 4,666,667 Private Placement Warrants at a price of $1.50
per warrant ($7,000,000 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. A portion of the purchase price of the Private Placement Warrants was added to the proceeds from this offering to be held in the Trust Account.
Also in connection with the partial exercise of the Over-Allotment Option, the Sponsor purchased an additional 333,333 Private Placement Warrants at a purchase price of $1.50 per Warrant.
The aggregate number of Private Placement Warrants outstanding as a result of the Initial Public Offering and
over-allotment is 5,000,000 and the aggregate proceeds are $7,500,000 .
The Private Placement Warrants will not be redeemable by the Company so long as they are held by the initial purchasers or their permitted transferees. The initial
purchasers, or their permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than initial purchasers or their permitted transferees, the
Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the Initial Public Offering. Otherwise,
the Private Placement Warrants have terms and provisions that are identical to those of the warrants being sold as part of the units in the Initial Public Offering.
Note 6 — Related Party Transactions
Founder Shares
On December 30, 2020, the Sponsor paid $25,000 , or
approximately $0.003 per share, to cover certain offering costs in consideration for 7,187,500 shares of Class B Ordinary Shares, par value $0.0001
(the “Founder Shares”). Up to 937,500 Founder Shares were subject to forfeiture by the Sponsor depending on the extent to which
the underwriters’ Over-Allotment Option was exercised. On May 5, 2021, the
underwriters partially exercised the Over-Allotment Option, which left 625,000 Founder Shares no longer subject to forfeiture and
resulted in aggregate of 6,875,000 Founder Shares outstanding.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares and any Class A Ordinary Shares issuable upon conversion thereof
until the earlier to occur of: (i) one year after the completion of the initial Business Combination or (ii) the date on which the
Company completes a liquidation, merger, share exchange or other similar transaction after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Class A Ordinary Shares for cash,
securities or other property; except to certain permitted transferees and under certain circumstances (the “Lock-Up”). Notwithstanding the foregoing, if the closing price of Class A Ordinary Shares equals or exceeds $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 the initial Business Combination or (2) if the Company consummates a transaction after
the initial Business Combination which results in the Company’s shareholders having the right to exchange their shares for cash, securities or other property, the Founder Shares will be released from the Lock-Up.
Advance from Related Party
On June 17, 2022, the Sponsor issued an advance payment of $16,563
towards the Company’s liabilities. As of June 30, 2022, advances of $16,563 remain unpaid and outstanding.
Promissory Notes — Related Party
On December 30, 2020, the Sponsor agreed to loan the Company up to $300,000
to be used for a portion of the expenses of the Initial Public Offering. These loans are non-interest bearing, unsecured and are due at the earlier of September 30, 2021 or the closing of the Initial Public Offering. The loan was repaid upon the closing of the Initial Public Offering out of the offering proceeds that had been allocated to the payment of offering expenses.
On November 15, 2021, the Company issued an unsecured promissory note in the amount of up to $250,000
to DTA Master, LLC, a Delaware limited-liability company, a related party and an affiliate of the Sponsor. The proceeds of the Note, which may be drawn down from time to time until the Company consummates its initial Business Combination,
will be used for general working capital purposes. The Note bears no interest and is payable in full upon the earlier to occur of (i) twenty-four (24 )
months from the closing of the Initial Public Offering (or such later date as may be extended in accordance with the terms of the Company’s amended and restated memorandum and articles of association) or (ii) the consummation of the initial
Business Combination. A failure to pay the principal within business days of the date specified above or the commencement
of a voluntary or involuntary bankruptcy action shall be deemed an event of default, in which case the Note may be accelerated. On April 12, 2022, the Company amended and restated the Note to increase the Note’s principal amount to $500,000 . As of June 30, 2022 and December 31, 2021, the Company had $500,000
and $77,000 outstanding under the Note, respectively. On August 18, 2022, the Company further amended and restated the
Note to increase the Note’s principal amount to $750,000 .
Working Capital Loans
In addition, in order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, the Company will repay the Working Capital
Loans. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used
to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into Private Placement Warrants
at a price of $1.50 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants. As of
June 30, 2022 and December 31, 2021, the Company had no
Administrative Support Agreement
Commencing on the date of the Prospectus, the Company began to be obligated to pay the Sponsor up to $15,000 per month for office space, utilities, secretarial and administrative support services provided to members of the Company’s management team. Upon completion of the
initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three
months ended June 30, 2022 and 2021, the Company incurred and accrued $43,362 and $43,149 of administrative support services fees, respectively. For the six months ended June 30, 2022 and 2021, the Company incurred and accrued $88,362 and $44,152 of
administrative support services fees, respectively.
15
Note 7 — Commitments & Contingencies
Registration Rights
The holders of the (i) Founder Shares, which were issued in a private placement prior to the closing of the offering, (ii) Private Placement Warrants, which were
issued in a private placement simultaneously with the closing of the offering and the Class A Ordinary Shares underlying such Private Placement Warrants and (iii) Private Placement Warrants that may be issued upon conversion of working capital
loans will have registration rights to require the Company to register a sale of any of the Company’s securities held by them pursuant to a registration rights agreement. Pursuant to the registration rights agreement and including the
underwriters’ exercise of 2,500,000 units of their Over-Allotment Option and $1,500,000 of working capital loans are converted into Private Placement Warrants, the Company will be obligated to register up to 15,166,667 Class A Ordinary Shares and 6,000,000 warrants. The
number of Class A Ordinary Shares includes (i) 6,875,000 Class A Ordinary Shares to be issued upon conversion of the Founder Shares,
(ii) 5,000,000 Class A Ordinary Shares underlying the Private Placement Warrants and (iii) 1,000,000 Class A Ordinary Shares underlying the Private Placement Warrants issued upon conversion of working capital loans. The holders of these securities are entitled to
make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have
certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. 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 Prospectus to purchase up to additional 3,750,000 Units to cover over-allotments, if any. On May 5, 2021, the
underwriters partially exercised the Over-Allotment Option to purchase an additional 2,500,000 units and forfeited the remainder.
The underwriters were entitled to a cash underwriting discount of two percent (2 %) of the gross proceeds of the Initial Public Offering, or $5,500,000 . Additionally, the
underwriters are entitled to a deferred underwriting discount of 3.5 % of the gross proceeds of the Initial Public Offering and the
partial exercise of the Over-Allotment Option upon the completion of the Company’s initial Business Combination, or an aggregate of $9,625,000 .
Legal Fees
The Company has engaged a law firm to provide legal due diligence services and business combination services related to potential
business combination target companies. The Company expects that all fees and expenses related to the various engagements will be deferred and are to be paid fully upon the closing of its initial Business Combination. Deferred legal fees of $1,012,368 and $927,413 have been
recorded and presented within accrued expenses within the accompanying condensed balance sheets as of June 30, 2022 and December 31, 2021, respectively.
Note 8 — Shareholders’ Deficit
Preference shares — The Company is
authorized to issue a total of 1,000,000 preference shares at par value of $0.0001 each. At June 30, 2022 and December 31, 2021, there were no
Class A Ordinary Shares — The Company is
authorized to issue a total of 200,000,000 Class A Ordinary Shares at par value of $0.0001 each. At June 30, 2022 and December 31, 2021, there were 27,500,000
16
Class B Ordinary Shares — The Company is
authorized to issue a total of 20,000,000 Class B Ordinary Shares at par value of $0.0001 each. At June 30, 2022 and December 31, 2021, there were 6,875,000
Holders of Class A Ordinary Shares and holders of Class B Ordinary Shares will vote together as a single class on all matters submitted to a vote of the Company’s
shareholders, except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the
affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The Class B Ordinary Shares will automatically convert into Class A Ordinary Shares concurrently with or immediately following the consummation of the initial
Business Combination 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 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, 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.
Note 9 — Warrants
Each whole warrant entitles the holder to purchase one
Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company
issues additional Class A Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and
in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”), (y) the aggregate
gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the
funding of 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 the Company’s Class A Ordinary Shares during the 10 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the
“Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be
equal to 115 % of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180 % of the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after
the completion of the Company’s initial Business Combination and will expire five years after the completion of its initial Business
Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than (15 ) business days after the closing of the initial Business
Combination, it will use its commercially reasonable efforts to file with the SEC a post-effective amendment to the registration statement of which the Prospectus forms a part or a new registration statement registering, under the Securities Act,
the issuance of the Class A Ordinary Shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective and to maintain the effectiveness of such registration statement,
and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the Class A Ordinary Shares issuable upon exercise of
the warrants is not effective by the (60 th) business day after the closing of the initial Business Combination, warrant holders may, until such time as there is an
effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another
exemption. Notwithstanding the above, if the Company’s Class A Ordinary Shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section
18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company
so elect, it will not be required to file or maintain an effective 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.
17
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 $
|
| • |
upon not less than
|
| • |
if, and only if, the reported closing price of the ordinary shares equals or exceeds $
|
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 (except as described herein with respect to the Private Placement Warrants):
| • |
in whole and not in part;
|
| • |
at a price of $
|
| • |
upon not less than
|
| • |
if, and only if, the Reference Value (as defined above under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $
|
| • |
if the Reference Value is less than $
|
If the Company calls the warrants for redemption as described above, the management will have the option to require any holder that wishes to
exercise his, her or its warrant to do so on a “cashless basis.” In determining whether to require all holders to exercise their warrants on a “cashless basis,” the management will consider, among other factors, the Company’s cash position, the
number of warrants that are outstanding and the dilutive effect on the Company’s shareholders of issuing the maximum number of Class A Ordinary Shares issuable upon the exercise of the Company’s warrants. If the management takes advantage of this
option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of Class A Ordinary Shares equal to the quotient obtained by dividing (x) the product of the number of Class A Ordinary Shares underlying
the warrants, multiplied by the excess of the “fair market value” of the Company’s Class A Ordinary Shares over the exercise price of the warrants by (y) the fair market value. The “fair market value” will mean the average reported closing price
of the Class A Ordinary Shares for the 10 trading days ending on the third trading day prior to the date on which the notice of
redemption is sent to the holders of warrants.
18
Note 10 — 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. 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, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
| • |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active
markets or quoted prices for identical or similar instruments in markets that are not active; and
|
| • |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from
valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
The fair value of
the Public Warrant liability is classified within Level 1 of the fair value hierarchy. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis at June 30, 2022 and December 31,
2021 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
|
June 30,
|
Quoted
Prices In
Active
Markets |
Significant
Other
Observable
Inputs |
Significant
Other
Unobservable
Inputs |
|||||||||||||
|
2022
|
(Level 1)
|
(Level 2)
|
(Level 3) |
|||||||||||||
|
Description
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash held in trust account
|
$
|
|
$
|
|
$
|
|
$ |
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Public Warrants
|
|
|
|
|||||||||||||
| Private Warrants |
||||||||||||||||
| Total |
$ | $ | $ | $ |
||||||||||||
|
December 31,
|
Quoted
Prices In
Active
Markets
|
Significant
Other
Observable
Inputs
|
Significant
Other
Unobservable
Inputs
|
|||||||||||||
|
2021
|
(Level 1)
|
(Level 2)
|
(Level 3) |
|||||||||||||
|
Description
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash held in trust account
|
$
|
|
$
|
|
$
|
|
$ |
|||||||||
|
Liabilities:
|
||||||||||||||||
|
Public Warrants
|
|
|
|
|||||||||||||
|
Private Warrants
|
|
|
|
|||||||||||||
|
Total
|
$
|
|
$
|
|
$
|
|
$ |
|||||||||
The fair value of
the Public Warrants at June 30, 2022 and December 31, 2021 was classified as Level 1 due to the use of an observable market quote in an active market. Taking into account the make-whole provision included in the warrant agreement, the Private
Warrants are classified as level 2.
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
The following table provides quantitative information regarding fair value measurements of warrant liabilities as of December 31, 2021:
|
|
December 31, 2021
|
|||
|
Share price
|
$
|
|
||
|
Strike price
|
$
|
|
||
|
Term (in years)
|
|
|||
|
Volatility
|
|
%
|
||
|
Risk-free rate
|
|
%
|
||
|
Dividend yield
|
|
% | ||
The following table
presents the changes in the fair value of warrant liabilities:
|
Public
|
Private
Placement
|
Redeemable
(over-
allotment)
|
Private Placement
(over-allotment)
|
Warrant Liabilities
|
||||||||||||||||
|
Fair value as of December 31, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
|
Change in valuation inputs or other assumptions
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||
|
Fair value as of March 31, 2022
|
|
|
|
|
|
|||||||||||||||
| Change in valuation inputs or other assumptions |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||
| Fair value as of June 30, 2022 | ||||||||||||||||||||
|
Public
|
Private
Placement
|
Redeemable
(over-
allotment)
|
Private Placement
(over-allotment)
|
Warrant Liabilities
|
||||||||||||||||
|
Fair value as of January 1, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
| Fair value as of March 26, 2021 - Initial measurement |
||||||||||||||||||||
|
Change in valuation inputs or other assumptions
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||
|
Fair value as of March 31, 2021
|
|
|
|
|
|
|||||||||||||||
| Fair value as of May 5, 2021 - Initial measurement |
||||||||||||||||||||
| Change in valuation inputs or other assumptions |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||
| Fair value as of June 30, 2021 | ||||||||||||||||||||
Note 11 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed financial
statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed financial statements, other than as stated below.
On August 18, 2022, the Company further amended and restated the Note in its entirety to increase the Note’s principal amount to up to $750,000 , as further described in Notes 1 and 6 above.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
References in this report on Form 10-Q (the “Quarterly Report”) to “we,” “our,” “us” or the “Company” refer to Disruptive Acquisition Corporation I. References to our
“management” or our “management team” refer to our officers and directors and references to the “Sponsor” refer to Disruptive Acquisition Sponsor I, LLC. The following discussion and analysis of the Company’s financial condition and results of
operations should be read in conjunction with the unaudited interim 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.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and
assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such
forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or
other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Overview
We are a blank check company incorporated on December 29, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar
business combination with one or more businesses. Our sponsor is Disruptive Acquisition Sponsor I, LLC, a Delaware limited liability company.
The registration statement for our initial public offering was declared effective on March 23, 2021. On March 26, 2021, we consummated our initial public offering of
25,000,000 units at $10.00 per unit, generating gross proceeds of $250,000,000 and incurring offering costs of approximately $14,750,000, inclusive of $8,750,000 in a deferred underwriting discount. Substantially concurrently with the closing of
our initial public offering, we completed the private sale of 4,666,667 private placement warrants, at a price of $1.50 per private placement warrant, to our sponsor, generating gross proceeds of $7,000,000. On May 5, 2021, the underwriters
purchased an additional 2,500,000 units pursuant to the partial exercise of their overallotment option. The units were sold at an offering price of $10.00 per unit, generating additional gross proceeds of $25,000,000. In connection with the partial
exercise of the overallotment option, our sponsor purchased an additional 333,333 private placement warrants at $1.50, which generated an additional $500,000 in gross proceeds.
Following our initial public offering, the partial exercise of the overallotment option and the related sales of the private placement warrants described above, a total of $275,000,000 was placed in the trust account
and was invested in permitted U.S. “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 that invest only in direct U.S. government treasury obligations. In total, we incurred $15,712,871 in transaction costs, including $5,500,000 of an underwriting discount, $9,625,000 of a deferred underwriting
discount and $587,871 of other offering costs.
Our management has broad discretion with respect to the specific application of the net proceeds from our initial public offering and the sale of the private placement warrants, although substantially all of the net
proceeds are intended to be applied generally toward consummating a business combination.
We will only have until March 26, 2023, i.e., 24 months from the closing of our initial public offering (as such period may be extended pursuant to a shareholder vote) to complete our initial business combination. If
we have not completed our initial business combination within this time frame, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the
public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account (less taxes payable and up to $100,000 of interest to pay
dissolution expenses), divided by the number of 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 our remaining shareholders and our board of directors, liquidate and dissolve, subject, in the case of clauses (ii) and
(iii), to our obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to our
warrants, which will expire worthless if we do not complete our initial business combination within the allotted period.
We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination will be successful.
Liquidity, Capital Resources, and Going Concern
As of June 30, 2022, we had cash outside the trust account of $28,668 available for working capital needs. 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, and structure, negotiate and complete an initial business combination. All remaining cash held in the trust account is generally unavailable for its use, prior to an initial business combination, and is
restricted for use either in a business combination or to redeem ordinary shares. As of June 30, 2022, none of the amount in the trust account was available to be withdrawn as described above.
Through June 30, 2022, our liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares and the remaining net proceeds from our initial public offering and the sale of the private
placement warrants.
On November 15, 2021, we issued an unsecured promissory note in the amount of up to $250,000 to an affiliate of our sponsor. The proceeds of the note, which may be drawn down from
time to time until we consummate our initial business combination, will be used for general working capital purposes. The note bears no interest and is payable in full upon the earlier to occur of (i) twenty-four (24) months from the closing of
our initial public offering (or such later date as may be extended in accordance with the terms of our amended and restated memorandum and articles of association) or (ii) the consummation of our initial
business combination. A failure to pay the principal within five business days of the date specified above or the commencement of a voluntary or involuntary bankruptcy action shall be deemed an event of default, in which case the note may be
accelerated. On April 12, 2022, we amended and restated the note in its entirety to increase the note’s principal amount to $500,000. As of June 30, 2022 and December 31, 2021, we had $500,000 and
$77,000, respectively, in borrowings outstanding under the note. On August 18, 2022, we further amended and restated the Note to increase the Note’s principal amount to $750,000.
We anticipate that the $28,668 outside of the trust account as of June 30, 2022 will be sufficient to allow us 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. Until consummation of our business combination, we will be using the funds not held in the trust account, funds available to us
under the amended and restated promissory note issued on April 12, 2022 and any additional Working Capital Loans (as defined in Note 6 to the unaudited condensed financial
statements included herein) from our initial shareholders, officers and directors, or their respective affiliates (which is described in Note 6 to the unaudited condensed financial statements included
herein), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses,
reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating our business combination.
If the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amounts necessary to do so, the Company may have insufficient funds
available to operate its business prior to the consummation of its Business Combination and may need to raise additional capital, e.g., through loans from its Sponsor, officers, directors or third parties. If the Company is unable to raise
additional capital, it may be required to take additional measures to preserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan and reducing overhead expenses. The
Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. The Company cannot assure you that its plans to raise capital or to consummate an initial Business Combination before March
26, 2023 (absent any extensions of such period with shareholder approval) will be successful.
In addition, the Company only has 24 months from the closing of the Initial Public Offering (as such period may be extended pursuant to a shareholder vote) to complete its initial Business Combination. If the Company
has not completed its initial Business Combination within this Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days
thereafter, redeem the Public Shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less taxes payable and up to $100,000
of interest to pay dissolution expenses), divided by the number of 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 Company’s remaining shareholders and its board of directors, liquidate and dissolve, and
subject to the Company’s obligations under Cayman Islands law, in the case of clauses (ii) and (iii), provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or
liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company does not complete its initial Business Combination within the Combination Period.
In connection with the Company’s assessment of going concern considerations in accordance with ASU 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has
until March 26, 2023 (absent any extensions of such period with shareholder approval) to consummate its initial Business Combination. It is uncertain that the Company will be able to consummate its initial Business Combination by this time. If a
Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution. Management has determined that the potential liquidity constraints in addition to the mandatory liquidation, should a Business
Combination not occur, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be
required to liquidate after March 26, 2023. The Company intends to complete its initial Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business
Combination by March 26, 2023.
Risks and Uncertainties
Our management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position, results of
operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Results of Operations
All of our activities since inception through June 30, 2022 related to our formation, the preparation for our initial public offering and, since the closing of our initial public offering, the
search for a prospective target of our initial business combination.
We have neither engaged in any operations nor generated any revenues to date. We will not generate any operating revenues until after completion of our initial business combination. We will
generate nonoperating income in the form of interest income on cash and cash equivalents held in the trust account. We expect to continue to incur increased expenses as a result of being a public company (for legal, financial reporting,
accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2022, we had $2,688,681 in net income. We incurred $330,090 of formation and operating costs. We experienced a decrease in fair value of our warrant
liabilities of $2,647,404 and dividends earned on the trust account of $371,367 on our amounts held in the trust account.
For the six months ended June 30, 2022, we had $10,078,935 in net income. We incurred $810,016 of formation and operating costs. We experienced a decrease in fair value of our warrant
liabilities of $10,489,890 and dividends earned on the trust account of $399,061 on our amounts held in the trust account.
For the three months ended June 30, 2021, we had $4,629,915 in net income. We incurred $292,918 of formation and operating costs. We experienced a decrease in fair value of our warrant
liabilities of $4,914,170 and dividends earned on the trust account of $8,663 on our amounts held in the Trust Account.
For the six months ended June 30, 2021, we had $4,251,586 in net income. We incurred $318,360 of formation and operating costs. We experienced a decrease in fair value of our warrant
liabilities of $5,195,650 and dividends earned on the trust account of $8,663 on our amounts held in the Trust Account, offset by offering expenses related to warrants of $634,367.
Contractual Obligations
We do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities, other than as described below.
We entered into an administrative services agreement to pay our sponsor a monthly fee of up to $15,000 for office space, utilities, secretarial and administrative support services provided to
us and other expenses and obligations of our sponsor. We began incurring these fees on March 24, 2021 and will continue to incur these fees monthly until the earlier of the completion of a business combination and our liquidation. For the three
months ended June 30, 2022 and 2021, the Company incurred and accrued $43,362 and $43,149 of administrative support services fees, respectively. For the six months ended June 30, 2022 and 2021, the Company incurred and accrued $88,362 and $44,152
of administrative support services fees, respectively.
On November 15, 2021, we issued an unsecured promissory note in the amount of up to $250,000 to an affiliate of our sponsor. The proceeds of the note, which may be drawn down from time to time
until we consummate our initial business combination, will be used for general working capital purposes. The note bears no interest and is payable in full upon the earlier to occur of (i) twenty-four (24) months from the closing of our initial
public offering (or such later date as may be extended in accordance with the terms of our amended and restated memorandum and articles of association) or (ii) the consummation of our initial business combination. A failure to pay the principal
within five business days of the date specified above or the commencement of a voluntary or involuntary bankruptcy action shall be deemed an event of default, in which case the note may be accelerated. As of June 30, 2022 and December 31, 2021,
we had $500,000 and $77,000, respectively, in borrowings outstanding under the note. On April 12, 2022, we amended and restated the note in its entirety to increase the note’s principal amount to $500,000. On August 18, 2022, we further amended
and restated the Note to increase the Note’s principal amount to $750,000.
The underwriters of our initial public offering are entitled to a deferred underwriting discount of $0.35 per unit, or $9,625,000 in the aggregate. The deferred underwriting discount will
become payable to the underwriters from the amounts held in the trust account solely in the event that we complete a business combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been
prepared in accordance with GAAP. The preparation of these unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those
related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We have identified the following critical accounting policies:
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments, including our warrants, to determine if such
instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is reassessed at the end of each reporting period.
We issued an aggregate of 13,000,000 warrants in connection with our initial public offering and the simultaneous private placement,
which are recognized as derivative liabilities in accordance with ASC 815-40. In addition, we issued an aggregate of 1,166,667 warrants in connection with the partial exercise of the underwriters’
overallotment option. Accordingly, we recognize the warrants as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised
and any change in fair value is recognized in our statements of operations. The fair value of the warrants issued in connection with our initial public offering, the simultaneous private placement and the partial exercise of the underwriters’
overallotment option has been estimated using Monte Carlo simulations at each measurement date.
Class A Ordinary Shares Subject to Possible Redemption
We account for our Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares
subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable 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 our control) are classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. Our
Class A ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, as of June 30, 2022 and December 31, 2021, 27,500,000 shares of
Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ deficit section of our balance sheet.
Net Income (Loss) per Ordinary Share
We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The potential ordinary share for
outstanding warrants to purchase our shares were excluded from diluted earnings per share because the warrants are contingently exercisable and the contingencies have not yet been met. As a result, diluted net income (loss) per ordinary share is
the same as basic net income (loss) per ordinary share for the periods.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited
condensed financial statements.
In August 2020, FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic
815-40) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments, and simplifies the derivative
scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an
entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or
modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company is currently assessing the impact, if any, it would have on its financial position, results of operations or cash flows.
Off-Balance Sheet Arrangements
As of June 30, 2022 and December 31, 2021, we did not have any off-balance sheet arrangements.
JOBS Act
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 have elected 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 independent registered public accounting firm’s attestation report on our system of internal control 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 Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the report of the independent registered public accounting firm providing additional information about the audit and the
financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of our chief executive officer’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.
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 Quarterly 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, 2022, pursuant to Rule 13a-15(b) under the Exchange Act.
We determined that we had initially recorded our public and private warrants as equity instruments instead of as liabilities in our balance sheet as of March 26, 2021 and failed to record the liability related to the
over-allotment option, which we filed with our Current Report on Form 8-K on April 1, 2021.
As such, our internal control over financial reporting was not deemed adequate and resulted in classifying certain of the warrants we issued in March 2021 as equity in error. We determined this
to be a material weakness. This error in classification was brought to our attention when the Staff issued the SEC Warrant Statement. The SEC Warrant Statement addresses certain accounting and reporting considerations related to warrants of a kind
similar to those we issued at the time of our initial public offering in March 2021.
On May 27, 2021, we filed with the SEC Amendment No. 1 on Form 8-K/A to amend and restate our audited balance sheet as of March 26, 2021 to reflect the classification of our warrants as a
liability, in accordance with the SEC Statement.
In addition, as part of a review of our accounting for complex financial instruments during the fiscal quarter ended September 30, 2021, we also restated our accounting for our Class A ordinary
shares subject to possible redemption to comply with guidance in ASC 480. Redeemable equity instruments (including equity instruments that feature redemption rights that are either within the control of the holder or subject to redemption upon the
occurrence of certain events not solely within our control) are classified as temporary equity. Accordingly, we have determined that all of our outstanding Class A ordinary shares should be presented as temporary equity, outside of the
shareholders’ deficit section of our balance sheet.
On November 22, 2021, we filed with the SEC Amendment No. 2 on Form 8-K/A to amend and restate our audited balance sheet as of March 26, 2021 to reflect the classification of all of our
outstanding Class A ordinary shares as temporary equity.
During the financial close process for the three months ended March 31, 2022, we identified a material weakness related to the Company’s review of accrued
liabilities, specifically, the deferred legal fees mentioned in Note 7. While we have a control to reconcile accrued liabilities, we plan to continue to enhance our control around the search of unrecorded liabilities. 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.
As a result of errors identified in the financial reporting and closing process, we determined that a material weakness existed in our internal control.
As required by Rules 13a-15f and 15d-15 under the Exchange Act, our Certifying Officers carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures as of June 30, 2022. Based upon their evaluation, given the material weakness in our internal control over financial reporting described below, our Certifying Officers concluded that our disclosure controls and procedures (as defined in
Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were not effective as of June 30, 2022.
Notwithstanding the identified material weakness as of June 30, 2022, management, including the Certifying Officers, believe that the unaudited condensed financial statements contained in this
Quarterly Report fairly present, in all material respects, our financial condition, results of operations and cash flows for the fiscal period presented in conformity with GAAP.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and the
benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our
control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There 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.
| Item 1. |
Legal Proceedings
|
None.
| Item 1A. |
Risk Factors
|
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the Prospectus, our Annual Report on Form 10-K
for the year ended December 31, 2021 (the “Annual Report”) and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (the “Q1 Quarterly Report”). As of the date of this Quarterly Report, there have been no material changes to
the risk factors described in the Prospectus, the Annual Report or the Q1 Quarterly Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk
factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Use of Proceeds
Of the $277,000,000 in proceeds we received from our Initial Public Offering and the sale of the private placement warrants, a total of $275,000,000, including
$9,625,000 payable to the underwriters for a deferred underwriting discount, was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. We incurred a total of $587,871 of other costs
and expenses related to our initial public offering and the sale of the private placement warrants. The remaining proceeds were used for working capital purposes.
There has been no material change in the planned use of proceeds from such use as described in our registration statement on Form S-1 (File No. 333-253971), which
was declared effective by the SEC on March 23, 2021.
| Item 3. |
Defaults Upon Senior Securities
|
None.
| Item 4. |
Mine Safety Disclosures
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Not applicable.
| Item 5. |
Other Information
|
None.
| Item 6. |
Exhibits
|
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Exhibit Number
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Description
|
|
| 10.1 |
Second Amended and Restated Promissory Note, dated August 18, 2022, issued by Disruptive Acquisition Corporation I to an affiliate of Disruptive Acquisition Sponsor I, LLC.
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Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
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Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
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Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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Certification of Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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101.INS
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XBRL Instance Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
| * |
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.
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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By:
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/s/ Phillip C. Caputo
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Name:
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Phillip C. Caputo
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Title:
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Chief Financial Officer
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Dated: August 19, 2022
|
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31
Exhibit 10.1
THIS SECOND AMENDED AND RESTATED PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE
SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SECOND AMENDED AND RESTATED PROMISSORY NOTE
|
Principal Amount: $750,000
|
Disruptive Acquisition Corporation I, a Cayman
Islands exempted company and blank check company (the “Maker”), promises to pay to the order of DTA Master, LLC, a Delaware limited-liability company, or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of SEVEN HUNDRED FIFTY THOUSAND U.S. dollars ($750,000) in lawful money of
the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may
from time to time designate by written notice in accordance with the provisions of this Note.
This Note is executed and delivered by the Maker to amend and restate in its entirety that
certain note, dated as of November 15, 2021 in the original principal amount of up to two hundred fifty thousand dollars ($250,000), as subsequently amended and restated on April 12, 2022 (the “Restated Note”) to increase the original principal amount to up to five hundred thousand dollars
($500,000), executed and delivered by Maker and payable to the order of the Payee (the “Original Note”), to memorialize the amendment to the principal amount. The execution or delivery of this Note does not constitute a payment of any part of the indebtedness evidenced in the Original Note or the
Restated Note.
1. Principal. The principal balance of this Note shall be
payable on the earlier of: (i) twenty-four (24) months from the closing of the initial public offering (or such later date as may be extended in accordance with the terms of the Maker’s memorandum and articles of association) or (ii) the date on
which Maker consummates a business combination. The principal balance may be prepaid at any time.
2. Interest. No interest shall accrue on the unpaid principal
balance of this Note.
3. Application of Payments. All payments shall be applied first
to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the
payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.
4. [Reserved.]
5. [Reserved.]
6. Events of Default. The following shall constitute an event
of default (“Event of Default”):
(a) Failure to Make Required Payments. Failure by Maker to pay the principal
amount due pursuant to this Note within five (5) business days of the date specified above.
(b) Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case
under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate
action by Maker in furtherance of any of the foregoing.
(c) Involuntary Bankruptcy, Etc. The entry of a decree or
order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60)
consecutive days.
7. Remedies.
(a) Upon the occurrence of an Event of Default specified in Section 6(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and
payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Sections 6(b) and 6(c), the unpaid principal balance of this Note, and all other sums payable with regard to
this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.
8. Waivers. Maker and all endorsers and guarantors of, and
sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note,
and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or
providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued
hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.
9. Unconditional Liability. Maker hereby waives all notices in
connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any
manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the
payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.
10. Notices. All notices, statements or other documents which
are required or contemplated by this Note shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing,
(ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party
or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following
receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.
11. Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
12. Severability. Any provision contained in this
Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
13. Trust Waiver. Notwithstanding anything herein to the
contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in
or to any distribution of or from the trust account in which the proceeds of the initial public offering (the “IPO”) conducted
by the Maker (including the deferred underwriting discounts and commissions) and the proceeds of the sale of the warrants issued in a private placement that occurred in connection with the IPO were deposited, as described in greater detail in the
registration statement and prospectus filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any
reason whatsoever.
14. Amendment; Waiver. Any amendment hereto or waiver of any
provision hereof may be made with, and only with, the written consent of the Maker and the Payee.
15. Assignment. No assignment or transfer of this Note or any
rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.
[Signature page follows]
IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of
the day and year first above written.
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DISRUPTIVE ACQUISITION CORPORATION I
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a Cayman Islands exempted company
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By: |
/s/ Phillip C. Caputo |
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Name: |
Phillip C. Caputo
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Title: |
Chief Financial Officer
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DTA MASTER, LLC
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a Delaware limited-liability company
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By: |
/s/ Phillip C. Caputo |
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Name: |
Phillip C. Caputo |
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Title: |
Chief Financial Officer |
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[Signature Page to Promissory Note]
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Alexander J. Davis, certify that:
| 1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 of Disruptive Acquisition Corporation I;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
[Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
Date: August 19, 2022
|
|
|
/s/ Alexander J. Davis
|
|
|
Alexander J. Davis
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Exhibit 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Phillip C. Caputo, certify that:
| 1. |
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 of Disruptive Acquisition Corporation I;
|
| 2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
| 3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
| 4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
| a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
| b. |
[Paragraph omitted pursuant to SEC Release Nos. 33-8238/34-47986 and 33-8392/34-49313];
|
| c. |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
| d. |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
| 5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
| a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
| b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
Date: August 19, 2022
|
|
|
/s/ Phillip C. Caputo
|
|
|
Phillip C. Caputo
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Disruptive Acquisition Corporation I (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Alexander J. Davis, 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:
| (1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
| (2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date: August 19, 2022
|
|
|
/s/ Alexander J. Davis
|
|
|
Alexander J. Davis
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Disruptive Acquisition Corporation I (the “Company”) on Form 10-Q for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), I, Phillip C. Caputo, 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:
| (1) |
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
| (2) |
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date: August 19, 2022
|
|
|
/s/ Phillip C. Caputo
|
|
|
Phillip C. Caputo
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
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