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 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
(Address of principal executive offices) |
(Zip Code) |
Title of Each Class: |
Trading Symbol(s) |
Name of Each Exchange on Which Registered: | ||
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-third of one redeemable warrant |
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
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ITEM 1. |
INTERIM FINANCIAL STATEMENTS |
June 30, 2022 |
December 31, 2021 |
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(unaudited) |
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ASSETS: |
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Current assets: |
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Cash |
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$ | |
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$ |
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Prepaid expenses |
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Total current assets |
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Deferred offering costs |
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Cash and investments held in Trust Account |
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Total assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY (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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Promissory note - related party |
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Due to Sponsor |
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Total current liabilities |
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Warrant liabilit y |
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Deferred underwriting compensation |
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Total liabilities |
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Commitments and contingencies |
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Class A ordinary shares subject to possible redemption; |
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Shareholders’ equity (deficit): |
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Preference shares, $ |
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Class A ordinary shares, $ (excluding |
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Class B ordinary shares, $ (1) |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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Total shareholders’ equity (deficit) |
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Total liabilities and shareholders’ equity (deficit) |
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$ |
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$ |
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(1) | Shares outstanding reflect the issuance of |
Three months ended June 30, 2022 |
Six months ended June 30, 2022 |
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Operating costs |
$ | |
$ | |
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Loss from operations |
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Other income (expense): |
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Interest from investments held in Trust Account |
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Allocation of offering costs to warrant liability |
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Change in fair value of warrant liability |
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Net income |
$ |
$ |
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Weighted average number of Class A ordinary shares subject to possible redemption outstanding |
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Basic and diluted net income per share, Class A ordinary shares subject to redemption |
$ |
$ |
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Weighted average number of Class B ordinary shares outstanding (1) |
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Basic and diluted net income per share, Class B ordinary shares |
$ |
$ |
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(1) | Shares outstanding reflect the issuance of |
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Equity (Deficit) |
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Shares |
Amount |
Shares |
Amount |
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Balance at December 31, 2021 (1) |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||
Forfeiture of Class B shares (2) |
— | — | ( |
) | ( |
) | — | — | ||||||||||||||||||||
Cash received in excess of fair value of private warrants |
— | — | — | — | — | |||||||||||||||||||||||
Fair value of public warrants at issuance |
— | — | — | — | — | |||||||||||||||||||||||
Accretion of Class A ordinary shares subject to possible redemption |
— | — | — | — | ( |
) | ( |
) | ( |
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Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance at March 31, 2022 |
— | ( |
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Accretion of Class A ordinary shares subject to possible redemption |
— | — | — | — | — | ( |
) | ( |
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Net income |
— | — | — | — | — | |||||||||||||||||||||||
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Balance at June 30, 2022 |
$ |
$ |
$ |
— |
$ |
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$ |
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(1) | Shares outstanding reflect the issuance of |
(2) | Reflects the surrender of |
SCREAMING EAGLE ACQUISITION CORP. | ||
CONDENSED STATEMENT OF CASH FLOWS | ||
FOR THE SIX MONTHS ENDED JUNE 30, 2022 | ||
(UNAUDITED) |
Cash flows from operating activities: |
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Net income |
$ | |||
Adjustments to reconcile net income to net cash used in operating activities: |
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Interest income from investments held in Trust Account |
( |
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Change in fair value of warrant liability |
( |
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Warrant issuance transaction costs |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
( |
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Accounts payable and accrued expenses |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Principal deposited in Trust Account |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from private placement of warrants |
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Proceeds from sale of units in initial public offering |
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Payment of underwriters’ discount |
( |
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Payment of offering costs |
( |
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Repayment of advances from Sponsor |
( |
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Repayment of promissory note - related party |
( |
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Net cash provided by financing activities |
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Net change in cash |
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Cash at beginning of period |
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Cash at end of period |
$ | |||
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Supplemental disclosure of non-cash investing and financing activities: |
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Deferred underwriting fee payable |
$ | |||
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Gross proceeds |
$ | |||
Less |
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Fair value of Public Warrants at issuance |
( |
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Class A o rdinary s hare issuance costs |
( |
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Plus: |
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Accretion of carrying value to redemption value |
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Class A o rdinary s hares subject to possible redemption |
$ | |||
Three Months Ended |
Six Months Ended |
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June 30, 2022 |
June 30, 2022 |
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Class A |
Class B |
Class A |
Class B |
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Basic and diluted net income per ordinary share |
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Numerator: |
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Allocation of net income (loss) as adjusted |
$ | $ | $ | $ | ||||||||||||
Denominator: |
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Basic and diluted weighted average shares outstanding |
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Basic and diluted net income (loss) per ordinary share |
$ | $ | $ | $ |
• | 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. |
Carrying Value |
Gross Unrealized Holding (Loss) |
Quoted Prices in Active Markets (Level 1) |
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U.S. Government Treasury Securities as of June 30, 2022 (1) |
$ | $ | $ |
(1) | Maturity date |
(1) | in whole and not in part; |
(2) | at a price of $ |
(3) | upon not less than |
(4) | if, and only if, the reported closing price of the ordinary shares equals or exceeds $ sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any |
(Level 1) |
(Level 2) |
(Level 3) |
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Private placement warrants |
$ | — | $ | — | $ |
January 10, 2022 |
June 30, 2022 |
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Ordinary share stock price |
$ |
$ | ||||||
Exercise price |
$ |
$ | ||||||
Volatility ( 1 ) |
% | % | ||||||
Term |
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Risk-free rate |
% | % | ||||||
Dividend yield |
% | % | ||||||
Probability of completing Business Combination |
% ( 2 ) |
% ( 3 ) |
(1) |
As of June 30, 2022 volatility is probability adjusted. |
(2) |
Estimate based on completed SPAC market data published by third party as of January 10, 2022. |
(3) |
Estimate based on public trading of rights for SPACs and their implied business combination probabilities as of June 30, 2022. |
Level 3 Derivative warrant liability at December 31, 2021 |
$ | |||
Issuance of Private Warrants on January 10, 2022 |
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Change in fair value of derivative warrant liability |
( |
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Level 3 Derivative warrant liability at June 30, 2022 |
$ | |||
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | may significantly dilute the equity interest of investors in the Initial Public Offering, which dilution would increase if the anti-dilution provisions in the founder shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one |
• | may subordinate the rights of holders of Class A ordinary shares if preferred shares are issued with rights senior to those afforded our Class A ordinary shares; |
• | could cause a change in control if a substantial number of our Class A ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
• | may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us; and |
• | may adversely affect prevailing market prices for our Class A ordinary shares and/or warrants. |
• | default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
• | acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
• | our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
• | our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
• | our inability to pay dividends on our Class A ordinary shares; |
• | using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our Class A ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes; |
• | limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
• | increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and |
• | limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt. |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS. |
ITEM 1A. |
RISK FACTORS. |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. |
MINE SAFETY DISCLOSURES. |
ITEM 5. |
OTHER INFORMATION. |
ITEM 6. |
EXHIBITS |
* | Filed herewith. |
SCREAMING EAGLE ACQUISITION CORP. | ||||||
Date: August 15, 2022 | /s/ Eli Baker | |||||
Name: | Eli Baker | |||||
Title: | Chief Executive Officer | |||||
(Principal Executive Officer) | ||||||
/s/ Ryan O’Connor | ||||||
Name: | Ryan O’Connor | |||||
Title: | Vice President of Finance | |||||
(Principal Financial and Accounting Officer) |