☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cayman Islands | 001-40072 | 98-1568635 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) |
Ally Bridge Group, NY 430 Park Avenue ,12th Floor | 10022 | |
(Address Of Principal Executive Offices) | (Zip Code) |
Title of | Trading Symbol(s) | Name of on | ||
Class A Ordinary Shares, $0.0001 par value | ABGI | The Nasdaq Capital Market |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
ABG ACQUISITION CORP. I
Form
For the Quarter Ended September 30, 2021
Table of Contents
Page No. | ||||||
Item 1. | ||||||
1 | ||||||
1 | ||||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. | ||||||
Item 3. | ||||||
Item 4. | ||||||
Item 1. | Legal Proceedings | |||||
Item 1A. | ||||||
Item 2. | ||||||
21 | ||||||
Item 3. | Defaults Upon Senior Securities | 21 | ||||
Item 4. | Mine Safety Disclosures | 21 | ||||
Item 5. | Other Information | 21 | ||||
Item 6. | Exhibits | 21 | ||||
Signature | 22 |
September 30, 2021 | December 31, 2020 | |||||||||||||||
September 30, 2022 | December 31, 2021 | |||||||||||||||
(Unaudited) | (unaudited) | |||||||||||||||
Assets | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 617,654 | $ | 58,175 | $ | 98,291 | $ | 510,896 | ||||||||
Prepaid expenses | 451,047 | 178 | 137,687 | 355,887 | ||||||||||||
Total current assets | 1,068,701 | 58,353 | 235,978 | 866,783 | ||||||||||||
Investments held in Trust Account | 150,654,723 | — | 151,532,409 | 150,657,896 | ||||||||||||
Deferred offering costs associated with the initial public offering | — | 243,825 | ||||||||||||||
Total Assets | $ | 151,723,424 | $ | 302,178 | $ | 151,768,387 | $ | 151,524,679 | ||||||||
�� | ||||||||||||||||
Liabilities, Class A Ordinary Shares Subject to Redemption and Shareholders’ Equity (Deficit) | ||||||||||||||||
Liabilities, Class A Ordinary Shares Subject to Redemption and Shareholders’ Deficit | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 39,468 | $ | — | $ | 20,858 | $ | 16,394 | ||||||||
Accrued expenses | 206,534 | 202,000 | 260,668 | 180,730 | ||||||||||||
Note payable - related party | — | 100,000 | ||||||||||||||
Total current liabilities | 246,002 | 302,000 | 281,526 | 197,124 | ||||||||||||
Deferred underwriting commissions | 5,272,750 | — | 5,272,750 | 5,272,750 | ||||||||||||
Total liabilities | 5,518,752 | 302,000 | 5,554,276 | 5,469,874 | ||||||||||||
Commitments and Contingencies | ||||||||||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 15,065,000 and -0- | 150,650,000 | — | ||||||||||||||
Shareholders’ Equity (Deficit) | ||||||||||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding | 0 | — | ||||||||||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized;501,300 and -0- | 50 | — | ||||||||||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 3,766,250 shares issued and outstanding as of September 30, 2021 and December 31, 2020 | 377 | 377 | ||||||||||||||
Class A ordinary shares subject to possible redemption, $0.0001 par value; 15,065,000 shares issued and outstanding at $10.05 | 151,432,409 | 150,650,000 | ||||||||||||||
Shareholders’ Deficit | ||||||||||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued or outstanding | — | — | ||||||||||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; 501,300 non-redeemable shares issued and outstanding (excluding 15,065,000 shares subject to possible redemption) as of September 30, 2022 and December 31, 2021 | 50 | 50 | ||||||||||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 3,766,250 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | 377 | 377 | ||||||||||||||
Additional paid-in capital | — | 24,623 | — | — | ||||||||||||
Accumulated deficit | (4,445,755 | ) | (24,822 | ) | (5,218,725 | ) | (4,595,622 | ) | ||||||||
Total shareholders’ equity (deficit) | (4,445,328 | ) | 178 | |||||||||||||
Total shareholders’ d eficit | (5,218,298 | ) | (4,595,195 | ) | ||||||||||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 151,723,424 | $ | 302,178 | ||||||||||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 151,768,387 | $ | 151,524,679 | ||||||||||||
Three Months Ended September 30, 2021 | Nine Months Ended September 30, 2021 | |||||||
General and administrative expenses | $ | 188,098 | $ | 517,544 | ||||
General and administrative expenses - related party | 30,000 | 80,000 | ||||||
Loss from operations | (218,098 | ) | (597,544 | ) | ||||
Income from investments held in Trust Account | 2,275 | 4,723 | ||||||
Net loss | $ | (215,823 | ) | $ | (592,821) | |||
Basic and diluted weighted average shares outstanding of Class A ordinary shares | 15,566,300 | 12,772,349 | ||||||
Basic and diluted net loss per ordinary share, Class A ordinary shares | $ | (0.01 | ) | $ | (0.04 | ) | ||
Basic and diluted weighted average shares outstanding of Class B ordinary shares | 3,766,250 | 3,678,077 | ||||||
�� | ||||||||
Basic and diluted net loss per ordinary share, Class B ordinary shares | $ | (0.01) | $ | (0.04) | ||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
General and administrative expenses | $ | 174,498 | $ | 188,098 | $ | 625,207 | $ | 517,544 | ||||||||
General and administrative expenses - related party | 30,000 | 30,000 | 90,000 | 80,000 | ||||||||||||
Loss from operations | (204,498 | ) | (218,098 | ) | (715,207 | ) | (597,544 | ) | ||||||||
Income from investments held in Trust Account | 768,063 | 2,275 | 874,513 | 4,723 | ||||||||||||
Net income (loss) | $ | 563,565 | $ | (215,823 | ) | $ | 159,306 | $ | (592,821 | ) | ||||||
Basic and diluted weighted average shares outstanding of Class A ordinary shares | 15,566,300 | 15,566,300 | 15,566,300 | 12,772,349 | ||||||||||||
Basic and diluted net income (loss) per ordinary share, Class A ordinary shares | $ | 0.03 | $ | (0.01 | ) | $ | 0.01 | $ | (0.04 | ) | ||||||
Basic and diluted weighted average shares outstanding of Class B ordinary shares | 3,766,250 | 3,766,250 | 3,766,250 | 3,678,077 | ||||||||||||
Basic and diluted net income (loss) per ordinary share, Class B ordinary shares | $ | 0.03 | $ | (0.01 | ) | $ | 0.01 | $ | (0.04 | ) | ||||||
For the three and nine months ended September 30, 2022 | ||||||||||||||||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2021 | 501,300 | $ | 50 | 3,766,250 | $ | 377 | $ | — | $ | (4,595,622 | ) | $ | (4,595,195 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (302,458 | ) | (302,458 | ) | |||||||||||||||||||
Balance - March 31, 2022 (unaudited) | 501,300 | 50 | 3,766,250 | 377 | — | (4,898,080 | ) | (4,897,653 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (101,801 | ) | (101,801 | ) | |||||||||||||||||||
Balance - June 30, 2022 (unaudited) | 501,300 | 50 | 3,766,250 | 377 | — | (4,999,881 | ) | (4,999,454 | ) | |||||||||||||||||||
Accretion of Class A ordinary shares subject to redemption | — | — | — | — | — | (782,409 | ) | (782,409 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 563,565 | 563,565 | |||||||||||||||||||||
Balance - September 30, 2022 (unaudited) | 501,300 | $ | 50 | 3,766,250 | $ | 377 | $ | — | $ | (5,218,725 | ) | $ | (5,218,298 | ) | ||||||||||||||
Ordinary Shares | Additional Paid-in | Total | For the three and nine months ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A | Class B | Accumulated | Shareholders’ | Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity (Deficit) | Class A | Class B | Paid-in | Accumulated | Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Equity (Deficit) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | 0 | $ | 0 | 3,766,250 | $ | 377 | $ | 24,623 | $ | (24,822 | ) | $ | 178 | — | $ | — | 3,766,250 | $ | 377 | $ | 24,623 | $ | (24,822 | ) | $ | 178 | ||||||||||||||||||||||||||||||
Sale of shares to Sponsor in private placement | 501,300 | 50 | — | — | 5,012,950 | — | 5,013,000 | 501,300 | 50 | — | — | 5,012,950 | — | 5,013,000 | ||||||||||||||||||||||||||||||||||||||||||
Accretion of Class A ordinary shares subject to redemption | — | — | — | — | (5,037,573 | ) | (3,828,112 | ) | (8,865,685 | ) | — | — | — | — | (5,037,573 | ) | (3,828,112 | ) | (8,865,685 | ) | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (164,380 | ) | (164,380 | ) | — | — | — | — | — | (164,380 | ) | (164,380 | ) | ||||||||||||||||||||||||||||||||||||||
Balance - March 31, 2021 (unaudited) | 501,300 | 50 | 3,766,250 | 377 | 0 | (4,017,314 | ) | (4,016,887 | ) | 501,300 | 50 | 3,766,250 | 377 | — | (4,017,314 | ) | (4,016,887 | ) | ||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (212,618 | ) | (212,618 | ) | — | — | — | — | — | (212,618 | ) | (212,618 | ) | ||||||||||||||||||||||||||||||||||||||
Balance - June 30, 2021 (unaudited) | 501,300 | $ | 50 | 3,766,250 | $ | 377 | $ | 0 | $ | (4,229,932 | ) | $ | (4,229,505 | ) | 501,300 | 50 | 3,766,250 | 377 | — | (4,229,932 | ) | (4,229,505 | ) | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (215,823 | ) | (215,823 | ) | — | — | — | — | — | (215,823 | ) | (215,823 | ) | ||||||||||||||||||||||||||||||||||||||
Balance - September 30, 2021 (unaudited) | 501,300 | $ | 50 | 3,766,250 | $ | 377 | $ | 0 | $ | (4,445,755 | ) | $ | (4,445,328 | ) | 501,300 | $ | 50 | 3,766,250 | $ | 377 | $ | — | $ | (4,445,755 | ) | $ | (4,445,328 | ) | ||||||||||||||||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (592,821 | ) | |
Income from investments held in Trust Account | (4,723 | ) | ||
Changes in operating assets and liabilities: | ||||
Prepaid expenses | (450,869 | ) | ||
Accounts payable | 39,468 | |||
Accrued expenses | 136,535 | |||
Net cash used in operating activities | (872,410 | ) | ||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (150,650,000 | ) | ||
Net cash used in investing activities | (150,650,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Payment of note payable to related party | (100,000 | ) | ||
Proceeds received from initial public offering, gross | 150,650,000 | |||
Proceeds received from private placement | 5,013,000 | |||
Offering costs paid | (3,481,111 | ) | ||
Net cash provided by financing activities | 152,081,889 | |||
Net change in cash | 559,479 | |||
Cash - beginning of the period | 58,175 | |||
Cash - end of the period | $ | 617,654 | ||
Supplemental disclosure of noncash financing activities: | ||||
Offering costs included in accrued expenses | $ | 70,000 | ||
Reversal of offering costs included in accrued expenses in prior year | $ | 202,000 | ||
Deferred underwriting commissions | $ | 5,272,750 |
For the nine months ended September 30, | ||||||||
2022 | 2021 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | 159,306 | $ | (592,821 | ) | |||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Income from investments held in Trust Account | (874,513 | ) | (4,723 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 218,200 | (450,869 | ) | |||||
Accounts payable | 4,464 | 39,468 | ||||||
Accrued expenses | 124,938 | 136,535 | ||||||
Net cash used in operating activities | (367,605 | ) | (872,410 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | — | (150,650,000 | ) | |||||
Net cash used in investing activities | — | (150,650,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Payment of note payable to related party | — | (100,000 | ) | |||||
Proceeds received from initial public offering, gross | — | 150,650,000 | ||||||
Proceeds received from private placement | — | 5,013,000 | ||||||
Offering costs paid | (45,000 | ) | (3,481,111 | ) | ||||
Net cash (used in) provided by financing activities | (45,000 | ) | 152,081,889 | |||||
Net change in cash | (412,605 | ) | 559,479 | |||||
Cash - beginning of the period | 510,896 | 58,175 | ||||||
Cash - end of the period | $ | 98,291 | $ | 617,654 | ||||
Supplemental disclosure of noncash financing activities: | ||||||||
Offering costs included in accrued expenses | $ | — | $ | 70,000 | ||||
Reversal of offering costs included in accrued expenses in prior year | $ | — | $ | 202,000 | ||||
Deferred underwriting commissions | $ | — | $ | 5,272,750 |
As of March 31, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Class A ordinary shares subject to possible redemption | $ | 141,633,111 | $ | 9,016,889 | $ | 150,650,000 | ||||||
Class A ordinary shares | $ | 140 | $ | (90 | ) | $ | 50 | |||||
Additional paid-in capital | $ | 5,188,687 | $ | (5,188,687 | ) | $ | — | |||||
Accumulated deficit | $ | (189,202 | ) | $ | (3,828,112 | ) | $ | (4,017,314 | ) | |||
Total shareholders’ equity (deficit) | $ | 5,000,002 | $ | (9,016,889 | ) | $ | (4,016,887 | ) | ||||
Shares of Class A ordinary shares subject to possible redemption | 14,163,311 | 901,689 | 15,065,000 | |||||||||
Shares of Class A non-redeemable ordinary shares | 1,402,989 | (901,689 | ) | 501,300 |
Three Months Ended March 31, 2021 (unaudited) | ||||||||||||
Supplemental Disclosure of Noncash Financing Activities: | As Reported | Adjustment | As Restated | |||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 141,766,820 | $ | (141,766,820 | ) | $ | 0 | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | (133,709 | ) $ | 133,709 | $ | 0 |
As of June 30, 2021 (unaudited) | As Reported | Adjustment | As Restated | |||||||||
Class A ordinary shares subject to possible redemption | $ | 141,420,490 | $ | 9,229,510 | $ | 150,650,000 | ||||||
Class A ordinary shares | $ | 142 | $ | (92 | ) | $ | 50 | |||||
Additional paid-in capital | $ | 5,401,305 | $ | (5,401,305 | ) | $ | 0 | |||||
Accumulated defici t | $ | (401,820 | ) | $ | (3,828,113 | ) | $ | (4,229,933 | ) | |||
Total shareholders’ equity (deficit) | $ | 5,000,004 | $ | (9,229,510 | ) | $ | (4,229,506 | ) | ||||
Shares of Class A ordinary shares subject to possible redemption | 14,142,049 | 922,951 | 15,065,000 | |||||||||
Shares of Class A non-redeemable ordinary shares | 1,424,251 | (922,951 | ) | 501,300 |
Six Months Ended June 30, 2021 (unaudited) | ||||||||||||
Supplemental Disclosure of Noncash Financing Activities: | As Reported | Adjustment | As Restated | |||||||||
Initial value of Class A ordinary shares subject to possible redemption | $ | 141,766,820 | $ | (141,766,820 | ) | $ | 0 | |||||
Change in value of Class A ordinary shares subject to possible redemption | $ | (346,330 | ) | $ | 346,330 | $ | 0 |
Earnings Per Share | ||||||||||||
As Reported | Adjustment | As Restated | ||||||||||
For the three months ended March 31, 2021 (unaudited) | ||||||||||||
Net loss | $ | (164,380 | ) | $ | — | $ | (164,380 | ) | ||||
Weighted average shares outstanding - Class A ordinary shares | 15,065,000 | (7,973,686 | ) | 7,091,314 | ||||||||
Basic and diluted earnings per ordinary share - Class A ordinary shares | $ | — | $ | (0.02 | ) | $ | (0.02 | ) | ||||
Weighted average shares outstanding - Class B ordinary shares | 3,727,162 | (228,370 | ) | 3,498,792 | ||||||||
Basic and diluted earnings per ordinary shares - Class B ordinary shares | $ | (0.04 | ) | $ | 0.02 | $ | (0.02 | ) | ||||
For three months ended June 30, 2021 (unaudited) | ||||||||||||
Net loss | $ | (212,618 | ) | $ | — | $ | (212,618 | ) | ||||
Weighted average shares outstanding - Class A ordinary shares | 15,065,000 | 501,300 | 15,566,300 | |||||||||
Basic and diluted earnings per ordinary share - Class A ordinary shares | $ | — | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Weighted average shares outstanding - Class B ordinary shares | 4,267,550 | (501,300 | ) | 3,766,250 | ||||||||
Basic and diluted earnings per ordinary shares - Class B ordinary shares | $ | (0.05 | ) | $ | 0.04 | $ | (0.01 | ) | ||||
For the six months ended June 30, 2021 (unaudited) | ||||||||||||
Net loss | $ | (376,998 | ) | $ | — | $ | (376,998 | ) | ||||
Weighted average shares outstanding - Class A ordinary shares | 15,065,000 | (3,712,781 | ) | 11,352,219 | ||||||||
Basic and diluted earnings per ordinary share - Class A ordinary shares | $ | — | $ | (0.03 | ) | $ | (0.03 | ) | ||||
Weighted average shares outstanding - Class B ordinary shares | 3,998,849 | — | 3,633,260 | |||||||||
Basic and diluted earnings per ordinary shares - Class B ordinary shares | $ | (0.09 | ) | $ | 0.06 | $ | (0.03 | ) |
For the three months ended September 30, 2022 | For the nine months ended September 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per ordinary share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | 453,775 | $ | 109,790 | $ | 128,271 | $ | 31,035 | ||||||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding | 15,566,300 | 3,766,250 | 15,566,300 | 3,766,250 | ||||||||||||
Basic and diluted net income per ordinary share | $ | 0.03 | $ | 0.03 | $ | 0.01 | $ | 0.01 | ||||||||
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | For the three months ended September 30, 2021 | For the nine months ended September 30, 2021 | |||||||||||||||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||||||||||||||||||
Basic and diluted net loss per ordinary share: | ||||||||||||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||||||||
Allocation of net loss | $ | (173,778 | ) | $ | (42,045 | ) | $ | (460,275 | ) | $ | (132,546 | ) | $ | (173,778 | ) | $ | (42,045 | ) | $ | (449,090 | ) | $ | (143,731 | ) | ||||||||
Denominator: | ||||||||||||||||||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding | 15,566,300 | 3,766,250 | 12,772,349 | 3,678,077 | 15,566,300 | 3,766,250 | 12,772,349 | 3,678,077 | ||||||||||||||||||||||||
Basic and diluted net loss per ordinary share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||||||
Gross proceeds | $ | 150,650,000 | $ | 150,650,000 | ||||
Less: | ||||||||
Class A ordinary shares issuance costs | (8,865,685 | ) | (8,865,685 | ) | ||||
Plus: | ||||||||
Accretion of carrying value to redemption value | 8,865,685 | 8,865,685 | ||||||
Class A ordinary shares subject to possible redemption | $ | 150,650,000 | ||||||
Class A ordinary shares subject to possible redemption - December 31, 2021 | 150,650,000 | |||||||
Plus: | ||||||||
Increase in redemption value of Class A ordinary shares subject to redemption | 782,409 | |||||||
Class A ordinary shares subject to possible redemption - September 30, 2022 | $ | 151,432,409 | ||||||
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||||||||
Investments in U.S. Treasury money market funds | $ | 150,654,723 | 0— | 0 | ||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Investments held in Trust Account - Money Market Fund | $ | 151,532,409 | $ | — | $ | — |
Description | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account - Money Market Fund | $ | 150,657,896 | $ | — | $ | — |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to “we”, “us”, “our” or the “Company,” “ABG Acquisition Corp. I,” “ABG” “our,” “us” or “we” refer“Company” are to ABG Acquisition Corp.Corp I., except where the context requires otherwise. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with theour unaudited interim condensed financial statements and therelated notes thereto containedincluded 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 FormAct.Act of 1934, as amended. 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. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this Form 10-Q.Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SECSecurities and Exchange Commission (“SEC”) filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company on November 17, 2020. We were formed 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”). 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 ABG Acquisition Holdings I LLC, a Cayman Islands limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on February 16, 2021. On February 19, 2021, we consummated its Initial Public Offering of 15,065,000 Class A ordinary shares (the “Public Shares”), including the 1,965,000 Public Shares as a result of the underwriters’ full exercise of their over-allotment option, at an offering price of $10.00 per Public Share, generating gross proceeds of approximately $150.7 million, and incurring offering costs of approximately $8.9 million, of which approximately $5.3 million was for deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 501,300 Class A ordinary shares (the “Private Placement Shares”), at a price of $10.00 per Private Placement Share to the Sponsor, generating gross proceeds of approximately $5.0 million.
Upon the closing of the Initial Public Offering and the Private Placement, approximately $150.7 million ($10.00 per Public Share) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement were placed in a trust account (“Trust Account”), located in the United States at J.P. Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust Company acting as trustee, and have been invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of 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 paragraphs (d)(2), (d)(3) and (d)(4) of Rule
Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the amount of any deferred underwriting discount held in trust) at the time of the signing of the agreement to enter into the initial Business Combination. However, we 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.
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If we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or February 19, 2023 (the “Combination Period”), we 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
Going Concern Consideration and Capital Resources
As of September 30, 2021,2022, we had approximately $618,000$98,000 in our operating bank account and working capital of deficit approximately $823,000.
Our liquidity needs to date have been satisfied through a contribution of $25,000 from our Sponsor to cover for certain expenses in exchange for the issuance of the Founder Shares, the loan of $100,000 from the Sponsor pursuant to the Note, and the proceeds from the consummation of the Private Placement not held in the Trust Account. We fully repaid the Note on February 22, 2021. In addition, in order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of ourthe Sponsor, or certain of our officers and directors may, but are not obligated to, provide us with Working Capital Loans. As of September 30, 2022 and December 31, 2021 there were no amounts outstanding under any Working Capital Loan.
In connection with management’s assessment of going concern considerations in accordance with FASB ASC 205-40, “Presentation of Financial Statements-Going Concern,” management has determined that the foregoing, management believesliquidity condition and mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after February 19, 2023. The unaudited condensed financial statements do not include any adjustment that might be necessary if we will have sufficient working capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor, or certain of our officers and directorsare unable to meet its needs through the earlier of the consummation ofcontinue as a going concern. We intend to complete a Business Combination or one year from this filing.before the mandatory liquidation date. Over this time period, we will be using thesethe funds outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
Risks and Uncertainties
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. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.
Management continues to evaluate the impact of the
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Results of Operations
Our entire activity since inception up tothrough September 30, 2021, was in2022 related to our formation, the preparation for our formation and thean Initial Public Offering, and after thesince our Initial Public Offering, searchingour activity has been limited to the search for a target.prospective initial Business Combination. We will not be generatinggenerate any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended September 30, 2022, we had net income of approximately $564,000, which consisted of approximately $768,000 in income from investments held in the Trust Account, partially offset by approximately $174,000 in general and administrative expenses and $30,000 of general and administrative expenses to related party.
For the three months ended September 30, 2021, we had net loss of approximately $216,000, which consisted of approximately $218,000 in general and administrative expenses, including $30,000 of general and administrative expenses to related party, partlypartially offset by approximately $2,000 in income from investments held in the Trust Account.
For the nine months ended September 30, 2022, we had net income of approximately $159,000, which consisted of approximately $874,000 in income from investments held in the Trust Account partially offset by approximately $625,000 in general and administrative expenses, $90,000 of general and administrative expenses to related party.
For the nine months ended September 30, 2021, we had net loss of approximately $593,000, which consisted of approximately $598,000 in general and administrative expenses, including $80,000 of general and administrative expenses to related party, partlypartially offset by approximately $5,000 in income from investments held in the Trust Account.
Critical Accounting Policies
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.United States generally accepted accounting principles. The preparation of ourthese 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 as our critical accounting policies:
Investments Held in the Trust Account
Our portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When our investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When our investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities are included in income from investments held in Trust Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
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Class A ordinary shares subjectOrdinary 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 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. As part of the Private Placement, we issued 501,300 Private Placement Shares to our Sponsor. These Private Placement Shares will not be transferable, assignable or salable until 30 days after the completion of our initial Business Combination. They are also considered non-redeemable and are presented as permanent equity in the condensed balance sheets. Our Class A ordinary shares sold in the Initial Public Offering feature certain redemption rights that are considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at September 30, 2022 and December 31, 2021, 15,065,000 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ equitydeficit section of our condensed balance sheets.
Under ASC 480-10S99,480-10-S99, the Company has 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. Effective with the closing of the Initial Public Offering,our initial public offering, we recognized the accretion from initial book value to redemption amount, which resulted in charges against additional
Net Income (Loss)Loss Per Ordinary Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” We have two classes of ordinary 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 ordinary shares. This presentation assumes a business combination as the most likely outcome. Net income (loss)loss per ordinary share is calculated by dividing the net income (loss) by the weighted average ordinary shares outstanding for the respective period.
At September 30, 2022 and 2021, we did not have any dilutive securities and other contracts that could potentially be exercised or converted into ordinary shares and then share in our earnings. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per ordinary share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Our management dodoes not believe that any other recently issued, but not yet effective, accounting standards updates, if currently adopted would have a material effect on ourthe accompanying unaudited condensed financial statements.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The Jumpstart Our Business StartupsJOBS 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
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,”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 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule
Item 4. Controls and Procedures (restated)
Evaluation of Disclosure Controls and Procedures
Evaluation of disclosure controls and procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective as of September 30, 2022.
Changes in internal controlInternal Control over financial reporting
There waswere no changechanges in our internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2021,2022 covered by this Amendment No. 1,report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As of the date of this Quarterly Report on Form
Changes in laws or regulations, or a material weakness in our internal control over financial reporting as of September 30, 2021. If we are unablefailure to developcomply with any laws and maintain an effective system of internal control over financial reporting, weregulations, may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business, including our ability to negotiate and operating results.
We are subject to the application of ASC
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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 a Business Combination.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities
None.
Item 3. Defaults uponUpon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form
* | Filed herewith. |
** | Furnished herewith. |
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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 hereunto duly authorized.
Dated: | ABG Acquisition Corp. I | |||||
By: | /s/ Daniel Johnson | |||||
Name: | Daniel Johnson | |||||
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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