| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
References to the “Company,” “Infinite Acquisition Corp.,” “our,” “us” or “we” refer to Infinite Acquisition Corp. 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 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 on Form 10-Q (this “Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 checkCayman Islands exempted company incorporated on March 29, 2021 as a Cayman Islands exempted company for the purpose of effecting2021. Prior to our decision to wind down our business and redeem our public shareholders, our intention was to effect a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses (the “Business Combination”). We are an emerging growth company and, as such, we are subject to all of the risks associated with emerging growth companies.
Our sponsor is Infinite Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on November 18, 2021. On November 23, 2021, we consummated our Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), including the issuance of 3,600,000 Units as a result of the underwriters’ full exercise of their over-allotment option, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $16.0 million, of which approximately $9.7 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 13,540,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $13.5 million and incurring offering costs of approximately $23,000.
Upon the closing of Initial Public Offering and the Private Placement, approximately $281.5 million ($10.20 per Unit) of net proceeds, including the net proceeds of the Initial Public Offering and a portion of the proceeds of the Private Placement, was placed in a trust account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. government securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”) having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account.
OurPrior to the Company’s decision to wind down its business on October 23, 2023, our management hashad broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds arewere intended to be applied generally toward consummating a Business Combination. There iswas no assurance that we willwould be able to complete a Business Combination successfully. Our initial Business Combination must bewould have been with one or more operating businesses or assets with a fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable, if any, on the interest earned on the Trust Account) at the time we signsigned a definitive agreement in connection with the initial Business Combination. However, we willwould only have been able to complete a Business Combination if the post-transaction company ownsowned or acquiresacquired 50% or more of the voting securities of the target or otherwise acquiresacquired a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.
IfPrior to the Extension Meeting described below, if we arehad been unable to complete a Business Combination within 21 months from the closing of the Initial Public Offering, or August 23, 2023 (the “Combination Period”), we willwould have (1) ceaseceased all operations except for the purpose of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeemredeemed the Public Shares, at a per share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to August 23, 2023 including interest earned on the funds held in the Trust Account and not previously released to us to pay our taxes, if any (less 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 liquidating distributions, if any); and (3) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, dissolvedissolved and liquidate,liquidated, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will beare no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless ifbecause we fail towill not consummate a Business Combination within the Combination Period.
On August 22, 2023, we held the Extension Meeting to approve an amendment to the Company’s amended and restated memorandum and articles of association (the “Articles Amendment”) (i) to extend the date (the “Termination Date”) by which the Company has to consummate a Business Combination (the “Articles Extension”) from August 23, 2023 to September 23, 2023 (the “Articles Extension Date”) and to allow the Company, without another shareholder vote, to elect to extend the Termination Date to consummate a Business Combination on a monthly basis for up to fourteen times by an additional one month each time after the Articles Extension Date, by resolution of the Company’s board of directors, if requested by the Sponsor, in writing and upon five days’ advance notice prior to the applicable Termination Date, until November 23, 2024 or a total of up to fifteen months after August 23, 2023, unless the closing of a Business Combination shall have occurred prior thereto (the “Extension Amendment Proposal”), (ii) to allow for the conversion of the Company’s Class B ordinary shares, par value $0.0001 per share into Class A Ordinary Shares on a one-for-one basis at any time and from time to time prior to the consummation of a business combination subject to certain limitations as set forth in the Extension Proxy Statement (the “Class B Share Proposal”) (iii) to eliminate from the Articles the limitation that the Company may not redeem Class A ordinary shares issued as part of the units sold in the Company’s Initial Public Offering (the “Public Shares”) to the extent that such redemption would result in the Company having net tangible assets, as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended, of less than $5,000,001 (the “Redemption Limitation”) in order to allow the Company to redeem Public Shares irrespective of whether such redemption would exceed the Redemption Limitation (the “Redemption Limitation Amendment Proposal”), and (iv) to adjourn the Extension Meeting to a later date or dates, if necessary, (a) to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Extension Meeting, there are insufficient ordinary shares represented (either in person or by proxy) at the Extension Meeting to approve the Extension Amendment Proposal, the Class B Share Proposal or the Redemption Limitation Amendment Proposal, (b) to constitute a quorum necessary to conduct business to vote on the Extension Amendment Proposal, the Class B Share Proposal or the Redemption Limitation Amendment Proposal at the Extension Meeting, or (c) if the holders of Public Shares have elected to redeem an amount of shares in connection with the Extension Amendment Proposal, the Class B Share Proposal or the Redemption Limitation Amendment Proposal such that the Company would not adhere to the continued listing requirements of the New York Stock Exchange (the “Adjournment Proposal”), and to consider any other business as may be properly brought before the Extension Meeting and to approve the Redemption Limitation Amendment Proposal.
In connection with the vote to approve the Articles Amendment, the holders of 19,590,635 ordinary shares of the Company properly exercised their right to redeem their Public Shares (and did not withdraw their redemption) for cash at a redemption price of approximately $10.66 per Public Share, for an aggregate redemption amount of $208,788,481.
On September 23, 2023, we approved the first one-month extension of the time period during which the Company may consummate an initial business combination (such time period, the “Business Combination Period”). In connection with this extension of the Business Combination Period to October 23, 2023 (the “Extension”), the Company drew an aggregate of $120,000 (the “Extension Funds”) from the Extension Note. The Extension was the first of fourteen one-month extensions permitted under the Amended and Restated Memorandum and Articles of Association.
On October 23, 2023, the Company issued a press release announcing that the Company will redeem its Class A ordinary shares, par value $0.0001 (the “Shares”), effective as of November 6, 2023, because the Company will not consummate an initial business combination within the time required by its Amended and Restated Memorandum and Articles of Association, as extended in connection with the Extension Meeting. The redemption of the Shares was completed on November 6, 2023. In connection with the redemption of the Public Shares all Units were mandatorily separated into their components. After November 6, 2023, the Company is ceasing all operations except for those required to wind up the Company’s business and will be cancelling the Public Warrants and Private Placement Warrants.
Liquidity and Going Concern
As of JuneSeptember 30, 2023, we had approximately $12,000$2,000 in our operating bank account and a working capital deficit of approximately $1.1$1.9 million inclusive of a note payable and convertible note payable to our Sponsor.
Prior to the completion of the Initial Public Offering and Private Placement, our liquidity needs were satisfied through a contribution of $25,000 from the Sponsor to cover for certain expenses in exchange for the issuance of the Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”), and a loan of approximately $269,000 from the Sponsor pursuant to a promissory note originally issued on April 9, 2021 (the “Note”). We repaid the Note in full on November 24, 2021. Subsequent to the consummation of the Initial Public Offering, our liquidity has been satisfied through the certain proceeds from the Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, provide us loans in order to finance transaction costs in connection with a Business Combination (“Working Capital Loans”). As of JuneSeptember 30, 2023 and December 31, 2022, there were no amounts outstanding under any Working Capital Loans.
In February 2022, our Sponsor committed to provide us an aggregate of up to $900,000 in loans in order to finance our working capital needs (including transaction costs in connection with a Business Combination) (the “Sponsor Loan Commitment”), and the Sponsor increased the principal amount of the Sponsor Loan Commitment to $1.2 million as of June 30, 2022. As of JuneSeptember 30, 2023 and December 31, 2022, there were $450,000$780,000 and $400,000 of advances drawn under the Sponsor Loan Commitment, respectively.
In August 2023, the Company issued an unsecured convertible promissory note in the principal amount of up to $1.8 million (the “Extension Note”) to the Sponsor for general corporate purposes and the funding of the deposits into the Trust Account that the Company is required to make pursuant to its Amended and Restated Memorandum and Articles of Association in connection with the optional extensions that may be requested by the Sponsor. The Extension Note does not bear interest and would have matured upon closing of an initial Business Combination. Up to $1,500,000 of the amounts loaned under the Extension Note would have been convertible in connection with an initial Business Combination at the option of the Sponsor into warrants of the Company (“Working Capital Warrants”), at a conversion price equal to $1.00 per Working Capital Warrant. The terms of the Working Capital Warrants would have been identical to those of the private placement warrants that were issued to the Sponsor in connection with the Company’s Initial Public Offering. Given that the Company will not be consummating an initial Business Combination, the Extension Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The maturity date of the Extension Note may be accelerated upon the occurrence of an Event of Default (as defined under the Extension Note). Any Working Capital Warrants issuable upon conversion of the Extension Note would not have been registered under the Securities Act and would have been issued in reliance on the exemption from registration requirements provided by Section 4(a)(2) thereof. On August 22, 2023 and September 20, 2023, $120,000 each were drawn under the Extension Note and were deposited in the Trust Account in connection with the Articles Amendment. As of September 30, 2023, there was $240,000 outstanding under this Extension Note.
In connection with our assessment of going concern considerations in accordance with FASB accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the working capital deficit, as well as the mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. Management intends to complete
On October 23, 2023, the Company issued a Business Combination prior topress release announcing that the mandatory liquidation date. No adjustments have been made toCompany will redeem its Shares, effective as of November 6, 2023, because the carrying amountsCompany will not consummate an initial business combination within the time required by its Amended and Restated Memorandum and Articles of assets or liabilities should we beAssociation, as extended in connection with the Extension Meeting. The redemption of the Shares was completed on November 6, 2023. In connection with the redemption of the Public Shares all Units were mandatorily separated into their components. After November 6, 2023, the Company is ceasing all operations except for those required to liquidate after August 23, 2023. The unaudited condensed financial statements do not include any adjustment that mightwind up the Company’s business and will be necessary if we are unable to continue as a going concern.cancelling the Public Warrants and Private Placement Warrants.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. The impact of this action and related sanctions on the world economy and the Company’s ability to consummate a Business Combination are not determinable as of the date of this Report. Further, the specific impact of this action on our financial condition, results of operations, and cash flows is also not determinable as of the date of this Report.
Results of Operations
Our entire activity since inception up to JuneSeptember 30, 2023, was in preparation for our formation and the Initial Public Offering, and since the completion of the Initial Public Offering, the search for business combination candidates. We will not be generating any operating revenues until the closingas a result of its decision to wind down its business and completion of our initial Business Combination.redeem its public shareholders on November 6, 2023.
For the three months ended JuneSeptember 30, 2023, we had a net income of approximately $3.0$2.1 million, which consisted of approximately $3.4$2.7 million income from investments held in the Trust Account, partially offset by approximately $0.3$0.5 million in general and administrative expenses and approximately $30,000 of related party administrative fees of approximately $33,000.fees.
For the sixthree months ended JuneSeptember 30, 2022, we had a net income of approximately $814,000, which consisted of approximately $1.3 million net income on the investments held in the Trust Account, partially offset by approximately $331,000 in general and administrative expenses and approximately $113,000 of related party administrative fees.
For the nine months ended September 30, 2023, we had a net income of approximately $5.6$7.7 million, which consisted of approximately $6.4$9.1 million income from investments held in the Trust Account, partially offset by approximately $0.7$1.2 million in general and administrative expenses and approximately $126,000 of related party administrative fees of approximately $95,000.fees.
For the threenine months ended JuneSeptember 30, 2022, we had a net lossincome of approximately $60,000,$261,000, which consisted of approximately $304,000 in general and administrative expenses and related party administrative fees of approximately $135,000, partially offset by approximately $379,000 of$1.7 million net income on the investments held in the Trust Account.
For the six months ended June 30, 2022, we had a net loss ofAccount, partially offset by approximately $553,000, which consisted of approximately $693,000$1.0 million in general and administrative expenses and approximately $375,000 of related party administrative fees of approximately $263,000, partially offset by approximately $403,000 of net income on the investments held in the Trust Account.fees.
Related Party Transactions
Founder Shares
On April 9, 2021, the Sponsor paid $25,000 to cover certain offering costs on our behalf in exchange for issuance of 5,750,000 Class B ordinary shares, par value $0.0001 per share. On November 2, 2021, the Sponsor transferred 25,000 Founder Shares to each of our board of directors (the holders of our Founder Shares, the “Initial Shareholders”). On November 18, 2021, we effected a share capitalization resulting in an aggregate of 6,900,000 Founder Shares outstanding. The Sponsor agreed to forfeit up to 900,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the Underwriter so that the Founder Shares would represent 20% of our issued and outstanding ordinary shares after the Initial Public Offering. On November 23, 2021, the Underwriter exercised the over-allotment option in full; thus, these 900,000 Founder Shares were no longer subject to forfeiture.
On June 2, 2023, pursuant to Section 1 of the Securities Assignment Agreement, by and between the Sponsor and Annastasia Skilakos, dated November 2, 2021 (the “Securities Assignment Agreement”), the Sponsor exercised its option to repurchase the Founder Shares held by Annastasia Skilakos in connection with her resignation as a director of the Company at the original purchase price of the Founder Shares (approximately $0.004 per Founder Share). There was no impact to the condensed financial statements as a result of this transaction.
The Initial Shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or earlier if, subsequent to the initial Business Combination, the closing price of the Class A ordinary share equals or exceeds $12.00 per share (as adjusted for share sub-divisions, capitalization of shares, share dividends, rights issuances, 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, and (B) the date following the completion of the initial Business Combination on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, we consummated the Private Placement of 13,540,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant, to the Sponsor, generating proceeds of approximately $13.5 million, and incurring offering costs of approximately $23,000.
Each Private Placement Warrant iswas exercisable for one whole Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust Account. IfGiven that we dowill not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants arewere non-redeemable for cash and exercisable on a cashless basis.
The Sponsor and the officers and directors agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination. The Public Warrants and Private Placement Warrants will be cancelled in connection with the Company’s liquidation and will expire worthless.
Related Party Loans
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors may, but are not obligated to, loan us Working Capital Loans. IfHad we completecompleted a Business Combination, we will repaywould have repaid the Working Capital Loans out of the proceeds of the Trust Account released to us. In the eventGiven that a Business Combination does notwill close, we may use a portion of the proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account wouldhave be used to repay the Working Capital Loans. The Working Capital Loans would have either bebeen repaid upon consummation of a Business Combination or, at the lender’s discretion, without interest, up to $1.5 million of such Working Capital Loans may be convertiblecould have been converted into warrants of the post-Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of JuneSeptember 30, 2023 and December 31, 2022, we had no borrowings under any Working Capital Loans.
In February 2022, the Sponsor committed to provide the Company an aggregate of up to $900,000 in loans in order to finance the Company’s working capital needs (including transaction costs in connection with a Business Combination), and the Sponsor increased the principal amount of the Sponsor Loan Commitment to $1.2 million as of June 30, 2022. As of JuneSeptember 30, 2023 and December 31, 2022, there were $450,000$780,000 and $400,000 of advances drawn under Sponsor Loan Commitment, respectively.
In August 2023, the Company issued the Extension Note to the Sponsor for general corporate purposes and the funding of the deposits into the Trust Account that the Company is required to make pursuant to its Amended and Restated Memorandum and Articles of Association in connection with the optional extensions that may be requested by the Sponsor. The Extension Note does not bear interest and matures upon closing of an initial Business Combination. Up to $1,500,000 of the amounts loaned under the Extension Note would have been convertible at the option of the Sponsor into Working Capital Warrants, at a conversion price equal to $1.00 per Working Capital Warrant. The terms of the Working Capital Warrants would have been identical to those of the private placement warrants that were issued to the Sponsor in connection with the Company’s Initial Public Offering. Given that the Company will not be consummating an initial Business Combination, the Extension Note will be repaid only from funds held outside of the Trust Account or will be forfeited, eliminated or otherwise forgiven. The maturity date of the Extension Note may be accelerated upon the occurrence of an Event of Default (as defined under the Note). Any Working Capital Warrants issuable upon conversion of the Note would not have been registered under the Securities Act and would have been issued in reliance on the exemption from registration requirements provided by Section 4(a)(2) thereof. On August 22, 2023 and September 20, 2023, $120,000 each were drawn under the Extension Note and were deposited in the Trust Account in connection with the Articles Amendment. As of September 30, 2023, there was $240,000 outstanding under the Extension Note.
Administrative Services Agreement
On November 23, 2021, we entered into an agreement with the Sponsor, pursuant to which we agreed to pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services provided to us until the earlier of the consummation of a Business Combination or liquidation. For the three and sixnine months ended JuneSeptember 30, 2023, we incurred $30,000 and $90,000, respectively, in expense for these services, which was included with general and administrative expenses – related party on the accompanying statements of operations. For the three and nine months ended September 30, 2022, we incurred $30,000 and $60,000,$90,000, respectively, in expense for these services, which was included with general and administrative expenses – related party on the accompanying statements of operations. As of JuneSeptember 30, 2023 and December 31, 2022, approximately $195,000$223,000 and $132,000, respectively, were payable for these services and included in accounts payable-related party as reflected in the accompanying balance sheets.
We may pay the Sponsor or any of our existing officers or directors, or any entity with which they are affiliated, a consulting fee or other compensation in connection with identifying, investigating and completing an initial Business Combination. The Sponsor, or any of our existing executive officers and directors, or any of their respective affiliates, including LionTree Advisors LLC (“LionTree Advisors”) and LionTree LLC (“LionTree”), and other entities affiliated with LionTree, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made to the Sponsor, officers, directors of us or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf. For the three and sixnine months ended JuneSeptember 30, 2023, we recorded approximately $0 and $25,000, respectively, in expenses in connection with consulting and compliance services with a related party. For the three and sixnine months ended JuneSeptember 30, 2022, we recorded approximately $105,000$83,000 and $203,000,$285,000, respectively, in expenses in connection with compliance services with a related party. As of JuneSeptember 30, 2023 and December 31, 2022, there were no amounts outstanding related to these services.
Financial Advisory Fees
In addition, LionTree Advisors was acting as our independent financial advisor as defined under FINRA Rule 5110(j)(9) to provide independent financial consulting services, consisting of a review of deal structure and terms and related structuring advice in connection with the Initial Public Offering. LionTree Advisors was entitled to receive a fee of approximately $2.2 million, paid upon the closing of the Initial Public Offering. In addition, LionTree Advisors will receivewould have received approximately $3.9 million which will be payable at the closing of the initial Business Combination.
The Underwriter has reimbursed us approximately $2.2 million for such fees at the closing of the Initial Public Offering and the Underwriter has alsohad agreed to reimburse us for approximately $3.9 million upon the completion of the initial Business Combination.
Commitments and Contractual Obligations
Registration and Shareholder Rights
The holders of Founder Shares and Private Placement Warrants (and any ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) were entitled to registration rights pursuant to a registration and shareholder rights agreement signed upon consummation of the Initial Public Offering. These holders were entitled to certain demands and “piggyback” registration rights. We will bearwould have borne the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Underwriter was entitled to an underwriting discount of $0.20 per unit, or approximately $5.5 million in the aggregate, paid upon the closing of the Initial Public Offering. An additional fee of $0.35 per unit, or approximately $9.7 million in the aggregate will bewould have been payable to the Underwriter for deferred underwriting commissions.commissions if the Company had consummated a Business Combination. The deferred fee willwould have become payable to the Underwriter from the amounts held in the Trust Account solely in the event that we completehad completed a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
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 FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within 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 JuneSeptember 30, 2023 and December 31, 2022, 8,009,365 and 27,600,000 Class A ordinary shares subject to possible redemption, respectively, are presented as temporary equity, outside of the shareholders’ equity section of our condensed balance sheets.
In connection with the vote to approve the Articles Amendment, the holders of 19,590,635 ordinary shares of the Company properly exercised their right to redeem their Public Shares (and did not withdraw their redemption) for cash at a redemption price of approximately $10.66 per Public Share, for an aggregate redemption amount of $208,788,481.
Under ASC 480-10-S99, we have elected to recognize changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Immediately upon the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption amount value. The change in the carrying value of the redeemable Class A ordinary shares resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit. Subsequently, the Company recognized changes in the redemption value as reflected on the accompanying unaudited condensed statements of changes in shareholders’ deficit.
Net Income (Loss) per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average number of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) per ordinary share does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase 27,340,000 Class A ordinary shares since their exercise is contingent upon future events. As a result, diluted net income (loss) per share is the same as basic net income (loss) per share for the three and sixnine months ended JuneSeptember 30, 2023 and 2022. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Our management does not believe that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the accompanying unaudited condensed financial statements.
Off-Balance Sheet Arrangements
As of JuneSeptember 30, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting and Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the unaudited condensed financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information otherwise required under this item.
| Item 4 | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of JuneSeptember 30, 2023, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of JuneSeptember 30, 2023, our disclosure controls and procedures were effective.
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.
PART II - OTHER INFORMATION
None.
Except for the below risk factor, as of the date of this Report, there have been no material changes to the risk factors disclosed in the annual report on Form 10-K filed with the SEC on March 22, 2023. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations.
We are subject to laws and regulations enacted by national, regional and local governments. In particular, we are required to comply with certain SEC and other legal requirements. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application may also change from time to time and those changes could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial business combination and results of operations.
On March 30, 2022, the SEC issued proposed rules relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies and increasing the potential liability of certain participants in proposed business combination transactions. These rules, if adopted, whether in the form proposed or in revised form, may materially increase the costs and time required to negotiate and complete an initial business combination and could potentially impair our ability to complete an initial business combination.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Unregistered Sales
On April 9, 2021, our Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering costs on our behalf in consideration of 5,750,000 Class B ordinary shares, par value $0.0001. In November 2021, our Sponsor transferred 25,000 Class B ordinary shares to each of our four independent directors and we effected a share capitalization resulting in our Initial Shareholders holding 6,900,000 Class B ordinary shares. Such securities were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. Our Sponsor is an accredited investor for purposes of Rule 501 of Regulation D.
Simultaneously with the consummation of our Initial Public Offering and the exercise of the over-allotment option by the Underwriter in full, our Sponsor purchased 13,540,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant, in a Private Placement that closed simultaneously with the closing of the Initial Public Offering. This issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act and no underwriting discounts or commissions were paid with respect to such sale.
Use of Proceeds
Of the gross proceeds received from the Initial Public Offering, the full exercise of the option to purchase additional ordinary shares and the Private Placement Warrants, $281,520,000 was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the sale of the Private Placement Warrants are invested in U.S. government treasury bills with a maturity of 180 days or less and 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.
We incurred offering costs of approximately $16.0 million (net of reimbursement of approximately $2.2 million from the underwriters), of which approximately $9.7 million was for deferred underwriting commissions.
| Item 3. | Defaults upon Senior Securities |
None.
| Item 4. | Mine Safety Disclosures. |
Not applicable.
| Item 5. | Other Information. |
None.
The following exhibits are filed or furnished as a part of, or incorporated by reference into, this Report.
Exhibit Number |
| Description |
|
| Amended and Restated Memorandum and Articles of Association (1) |
|
| Warrant Agreement between Continental Stock Transfer & Trust Company and the Company (1) |
|
| Specimen Unit Certificate (2) |
|
| Specimen Class A Ordinary Share Certificate (2) |
|
| Specimen Warrant Certificate (2) |
|
| Private Placement Warrants Purchase Agreement between the Company and the Sponsor (1) |
|
| Investment Management Trust Account Agreement between Continental Stock Transfer & Trust Company and the Company (1) |
|
| Registration and Shareholder Rights Agreement among the Company, the Sponsor and certain other equity holders named therein (1) |
|
| Letter Agreement among the Company, the Sponsor and the Company’s officers and directors (1) |
|
| Administrative Services Agreement between the Company and the Sponsor (1) |
|
| Engagement Letter between the Registrant and LionTree Advisors LLC (3) |
|
| Convertible Promissory Note, dated August 22, 2023 and issued to Infinite Sponsor LLC (4) |
| | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
|
| Certification of the Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
|
| Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
|
| Certification of the 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. |
* Filed herewith.
** Furnished herewith.
(1) Previously filed as an exhibit to our Current Report on Form 8-K filed on November 23, 2021 and incorporated by reference herein.
(2) Incorporated by reference to the registrant’s Form S-1, filed with the SEC on November 15, 2021.
(3) Previously filed as an exhibit to our Current Report on Form 8-K filed on December 1, 2021 and incorporated by reference herein.
(4) Previously filed as an exhibit to our Current Report on Form 8-K filed on August 23, 2023 and incorporated by reference herein.
SIGNATURE
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, thereunto duly authorized.
Dated: August 8,November 13, 2023 |
| INFINITE ACQUISITION CORP. |
|
|
| By: | /s/ David Farber |
|
| Name: | David Farber |
|
| Title: | Chief Financial Officer |
| | | (Principal Financial and Accounting Officer) |
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