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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices)
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(Zip Code)
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Title of each class:
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Trading Symbol(s)
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Name of each exchange
on which registered
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Large accelerated filer
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☐
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Accelerated filer
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☐
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☒
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Smaller reporting company
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Emerging growth company
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Page
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ii
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iv
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v
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1 |
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Item 1.
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1
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Item 1A.
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15 | |
Item 1B.
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54
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Item 2.
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54
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Item 3.
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54 | |
Item 4.
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54
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55 |
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Item 5.
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55
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Item 6.
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56
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Item 7.
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56
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Item 7A.
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61
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Item 8.
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61
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Item 9.
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61
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Item 9A.
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61
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Item 9B.
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63 | |
64 |
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Item 10.
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64
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Item 11.
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72
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Item 12.
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73
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Item 13.
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74
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Item 14.
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76
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77 |
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Item 15.
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77 | |
Item 16.
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78
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• |
“amended and restated memorandum and article of association” means the amended and restated memorandum and articles of
association that the Company adopted prior to the consummation of our initial public offering, as amended on March 6, 2023;
|
• |
“Carbon Revolution” means Carbon Revolution Limited (formerly known as Poppetell Limited), a private limited company incorporated in Ireland with registered number 607450.
|
• |
“Companies Act” means the Companies Act (As Revised) of the Cayman Islands, as the same may be amended from time to time;
|
• |
“Class A ordinary shares” means our shares of class A ordinary shares, par value $0.0001 per share;
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• |
“Class B ordinary shares” are to our shares of class B ordinary shares, par value $0.0001 per share;
|
• |
“founder shares” means the 5,327,203 Class B ordinary shares issued and outstanding.
|
• |
“Founder Holders” means the Sponsor, TRCA Subsidiary, Alison Burns, Paul Henrys and Gary Pilnick.
|
• |
“Industry Advisors” means Tom Bené, John Bryant, Mike Duffy, Steve Louden, Christopher O’Leary, Mike Polk and Bill Toler;
|
• |
“initial shareholders” means all of our shareholders immediately prior to the date of this report, including all of our officers, Industry Advisors and directors to the extent they hold ordinary shares;
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• |
“management” or our “management team” means our executive officers and directors;
|
• |
“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
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• |
“private placement warrants” means the warrants exercisable for one Class A ordinary share at a price of $11.50 per share issued to the Sponsor simultaneously with the closing of our initial public
offering and concurrently with the partial exercise of the underwriters’ over-allotment after our initial public offering in separate private placements at a price of $1.50 per warrant;
|
• |
“public warrants” means the warrants included in the units issued in our initial public offering, each whole warrant being exercisable for one Class A ordinary share at an exercise price of $11.50 per
share.
|
• |
“public shares” means our Class A ordinary shares sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);
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• |
“public shareholders” means the holders of our public shares, including our Sponsor and management team to the extent our Sponsor and/or members of our management team purchase public shares, provided that our Sponsor’s and each member
of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
|
• |
“Sponsor” means Twin Ridge Capital Sponsor LLC, a Delaware limited liability company;
|
• |
“TRCA Subsidiary” means Twin Ridge Capital Sponsor Subsidiary Holdings LLC, a Delaware limited liability company.
|
• |
“warrants” means our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent that they are no longer held by the initial purchasers of the private placement warrants or their
permitted transferees; and
|
• |
“we,” “us,” “our,” or “Company” means Twin Ridge Capital Acquisition Corp., a Cayman Islands exempted company.
|
• |
our ability to select an appropriate target business or businesses;
|
• |
our ability to complete our initial business combination, including our recently announced proposed business combination with Carbon Revolution;
|
• |
our expectations around the performance of a prospective target business or businesses;
|
• |
our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;
|
• |
our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;
|
• |
our potential ability to obtain additional financing to complete our initial business combination;
|
• |
our pool of prospective target businesses;
|
• |
our ability to consummate an initial business combination due to the uncertainty resulting from the COVID-19 pandemic;
|
• |
the ability of our officers and directors to generate a number of potential business combination opportunities;
|
• |
our public securities’ potential liquidity and trading;
|
• |
the lack of a market for our securities;
|
• |
the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;
|
• |
the trust account not being subject to claims of third parties; or
|
• |
our financial performance following our initial public offering.
|
• |
We are a company established for the purpose of identifying a company to partner with in order to effectuate a merger, share exchange, asset acquisition, share purchase, reorganization, or similar partnering transaction with no
operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
|
• |
Past performance by our management team or our Industry Advisors or their respective affiliates may not be indicative of future performance of an investment in us.
|
• |
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a
“going concern.”
|
• |
Our public shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our public shareholders do not
support such a combination.
|
• |
Your only opportunity to affect the investment decision regarding a potential business combination may be limited to the exercise of your right to redeem your shares from us for cash.
|
• |
If we seek shareholder approval of our initial business combination, our initial shareholders have agreed to vote in favor of such initial business combination, regardless of how our public shareholders vote.
|
• |
The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult for us to enter into a business combination
with a target.
|
• |
The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize our capital structure.
|
• |
The requirement that we consummate an initial business combination by the date by which we are required to consummate a business combination pursuant to our amended and restated memorandum and articles of association (the “Termination
Date”) may give potential target businesses leverage over us in negotiating a business combination and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we approach
our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that would produce value for our shareholders.
|
• |
Certain of our officers and directors have or will have direct and indirect economic interests in us and/or our Sponsor after the consummation of our initial public offering and such interests may potentially conflict with those of our
public shareholders as we evaluate and decide whether to recommend a potential business combination to our public shareholders.
|
• |
Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the recent increases in inflation, coronavirus (“COVID-19”) outbreak and
the status of debt and equity markets.
|
• |
We may not be able to consummate an initial business combination by the Termination Date, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate.
|
• |
If we seek shareholder approval of our initial business combination, our Sponsor, executive officers, Industry Advisors, directors or their affiliates may elect to purchase public shares or warrants, which may influence a vote on a
proposed business combination and reduce the public “float” of our Class A ordinary shares or public warrants.
|
• |
If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial business combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
|
• |
You will not have any rights or interests in funds from the trust account, except under certain limited circumstances. Therefore, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a
loss.
|
• |
The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
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• |
You will not be entitled to protections normally afforded to investors of many other blank check companies.
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• |
If we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A
ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
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• |
Because of our limited resources and the significant competition for business combination opportunities, it may be more difficult for us to complete our initial business combination. If we have not consummated our initial business
combination by the required time period, our public shareholders may receive only approximately $10.00 per public share, or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless.
|
• |
If the net proceeds of our initial public offering and the sale of the private placement warrants not being held in the trust account are insufficient to allow us to operate for the Termination Date, it could limit the amount available
to fund our search for a target business or businesses and our ability to complete our initial business combination, and we will depend on loans from our Sponsor, its affiliates or members of our management team to fund our search and to
complete our initial business combination.
|
• |
Subsequent to our completion of our initial business combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial
condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
|
• |
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by shareholders may be less than $10.00 per public share.
|
• |
Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders.
|
• |
We may not have sufficient funds to satisfy indemnification claims of our directors and executive officers.
|
• |
If, after we distribute the proceeds in the trust account to our public shareholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover
such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
|
• |
Because we are neither limited to evaluating a target business in a particular industry sector nor have we selected any specific target businesses with which to pursue our initial business combination, you will be unable to ascertain
the merits or risks of any particular target business’s operations.
|
Item 1. |
Business
|
• |
a track record of successfully identifying and acquiring companies and deploying a value creation toolkit to deliver shareholder value over an extended time period;
|
• |
substantial depth of industry experience which enables us to understand market trends, quickly evaluate business models and gauge their fit with our investment criteria;
|
• |
significant experience leading many of North America’s largest consumer and distribution companies, and developing and executing shareholder value creation programs including recruiting world-class management, identifying growth
opportunities, delivering operating efficiencies and successfully integrating strategic acquisitions;
|
• |
a deep network of senior-level industry executives who can be recruited to enhance target company management teams to help accelerate implementation of our value creation initiatives;
|
• |
a vast and highly leverageable deal sourcing network providing significant reach and access to a comprehensive opportunity set imperative to the sourcing process for our initial business combination;
|
• |
a history of accessing the public capital markets across various business cycles, including assisting companies with the transition to public ownership and providing leadership within public companies; and
|
• |
a deep expertise in proprietary and brokered deal sourcing, financial and operational due diligence, transaction negotiation and execution, equity and debt financing and managing multiple acquisitions.
|
• |
fundamentally sound but underperforming their potential and exhibit unrecognized value creation opportunities;
|
• |
can benefit from our team’s ability to harness its extensive industry sector experience and professional networks to develop and implement our collection of value-creation operational strategies;
|
• |
strong competitive market positioning driven by brand equity, advantages of scope or scale, differentiated products or services, proprietary technology, robust infrastructure or strong customer or supplier relationships;
|
• |
attractive financial profile with multiple avenues for continued future growth and margin upside that result in sustainable free cash flow generation;
|
• |
experienced and public-ready management team with internal reporting and control systems that can comply with the requirements of a public listing; and
|
• |
potential to offer an attractive risk-adjusted return for our shareholders across business cycles.
|
• |
Acquire the target company at an attractive price relative to our view of its intrinsic value:
|
• |
Enhance operational performance through driving organic growth, increasing profitability and strengthening market position:
|
• |
Optimize capital structure to establish a strong financial profile in support of future growth:
|
• |
Seek follow-on strategic acquisitions and divestitures to further grow shareholder value:
|
Item 1A. |
Risk Factors
|
• |
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 is payable on demand;
|
• |
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt 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.
|
• |
solely dependent upon the performance of a single business, property or asset; or
|
• |
dependent upon the development or market acceptance of a single or limited number of products, processes or services.
|
• |
restrictions on the nature of our investments; and
|
• |
restrictions on the issuance of securities,
|
• |
each of which may make it difficult for us to complete our initial business combination.
|
• |
In addition, we may have imposed upon us burdensome requirements, including:
|
• |
registration as an investment company with the SEC;
|
• |
adoption of a specific form of corporate structure; and
|
• |
reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations that we are currently not subject to.
|
• |
a limited availability of market quotations for our securities;
|
• |
reduced liquidity for our securities;
|
• |
a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the
secondary trading market for our securities;
|
• |
a limited amount of news and analyst coverage; and
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary
shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
|
• |
may subordinate the rights of holders of Class A ordinary shares if preference 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 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;
|
• |
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
|
• |
may not result in adjustment to the exercise price of our warrants.
|
• |
the history and prospects of companies whose principal business is the acquisition of other companies;
|
• |
prior offerings of those companies;
|
• |
our prospects for acquiring an operating business at attractive values;
|
• |
a review of debt-to-equity ratios in leveraged transactions;
|
• |
our capital structure;
|
• |
an assessment of our management and their experience in identifying operating companies;
|
• |
general conditions of the securities markets at the time of our initial public offering; and
|
• |
other factors as were deemed relevant.
|
• |
we have a board that includes a majority of “independent directors,” as defined under the rules of the NYSE;
|
• |
we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
|
• |
we have a nominating committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
• |
costs and difficulties inherent in managing cross-border business operations;
|
• |
rules and regulations regarding currency redemption;
|
• |
complex corporate withholding taxes on individuals;
|
• |
laws governing the manner in which future business combinations may be effected;
|
• |
exchange listing and/or delisting requirements;
|
• |
tariffs and trade barriers;
|
• |
regulations related to customs and import/export matters;
|
• |
local or regional economic policies and market conditions;
|
• |
unexpected changes in regulatory requirements;
|
• |
longer payment cycles;
|
• |
tax issues, such as tax law changes and variations in tax laws as compared to the United States;
|
• |
currency fluctuations and exchange controls;
|
• |
rates of inflation;
|
• |
challenges in collecting accounts receivable;
|
• |
cultural and language differences;
|
• |
employment regulations;
|
• |
underdeveloped or unpredictable legal or regulatory systems;
|
• |
corruption;
|
• |
protection of intellectual property;
|
• |
social unrest, crime, strikes, riots and civil disturbances;
|
• |
regime changes and political upheaval;
|
• |
terrorist attacks, natural disasters and wars; and
|
• |
deterioration of political relations with the United States.
|
Item 1B. |
Unresolved Staff Comments
|
Item 2. |
Properties
|
Item 3. |
Legal Proceedings
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
|
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
may significantly dilute the equity interest of investors in our initial public offering, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary
shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
|
• |
may subordinate the rights of holders of Class A ordinary shares if preference 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;
|
• |
may adversely affect prevailing market prices for our units, Class A ordinary shares and/or warrants; and
|
• |
may not result in adjustment to the exercise price of our 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 is payable on demand;
|
• |
our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt 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 7A. |
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8. |
Financial Statements and Supplementary Data
|
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A. |
Controls and Procedures
|
(1)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of our company,
|
(2)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
|
(3)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial statements.
|
Item 9B. |
Other Information
|
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
|
Item 10. |
Directors, Executive Officers and Corporate Governance
|
Name
|
Age
|
Position
|
||
Dale F. Morrison
|
74
|
Chairman of the Board of Directors
|
||
Sanjay K. Morey
|
51
|
Co-Chief Executive Officer, President and Director
|
||
William P. Russell, Jr.
|
50
|
Co-Chief Executive Officer, Chief Financial Officer and Director
|
||
Alison Burns
|
59
|
Director
|
||
Paul Henrys
|
52
|
Director
|
||
Gary Pilnick
|
58
|
Director
|
• |
meeting with our independent registered public accounting firm regarding, among other issues, audits, and adequacy of our accounting and control systems;
|
• |
monitoring the independence of the independent registered public accounting firm;
|
• |
verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
|
• |
inquiring and discussing with management our compliance with applicable laws and regulations;
|
• |
pre-approving all audit services and permitted non-audit services to be performed by our independent registered public accounting firm, including the fees and terms of the services to be performed;
|
• |
appointing or replacing the independent registered public accounting firm;
|
• |
determining the compensation and oversight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm regarding
financial reporting) for the purpose of preparing or issuing an audit report or related work;
|
• |
establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting
policies;
|
• |
monitoring compliance on a quarterly basis with the terms of our initial public offering and, if any noncompliance is identified, immediately taking all action necessary to rectify such noncompliance or otherwise causing compliance
with the terms of our initial public offering; and
|
• |
reviewing and approving all payments made to our existing shareholders, executive officers or directors and their respective affiliates. Any payments made to members of our audit committee will be reviewed and approved by our board of
directors, with the interested director or directors abstaining from such review and approval.
|
• |
should have demonstrated notable or significant achievements in business, education or public service;
|
• |
should possess the requisite intelligence, education and experience to make a significant contribution to the board of directors and bring a range of skills, diverse perspectives and backgrounds to its deliberations; and
|
• |
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the shareholders.
|
• |
reviewing and approving on an annual basis the corporate goals and objectives relevant to our executive officers’ performance in light of such goals and objectives and determining and approving the remuneration (if any) of each of our
executive officers based on such evaluation;
|
• |
reviewing and approving the compensation of all of our other Section 16 executive officers;
|
• |
reviewing our executive compensation policies and plans;
|
• |
implementing and administering our incentive compensation equity-based remuneration plans;
|
• |
assisting management in complying with our proxy statement and annual report disclosure requirements;
|
• |
approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our executive officers and employees;
|
• |
producing a report on executive compensation to be included in our annual proxy statement; and
|
• |
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
|
• |
duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
|
• |
duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
|
• |
directors should not improperly fetter the exercise of future discretion;
|
• |
duty to exercise powers fairly as between different sections of shareholders;
|
• |
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
|
• |
duty to exercise independent judgment.
|
Individual
|
Entity
|
Entity’s Business
|
Affiliation
|
Dale Morrison
|
Twin Ridge Capital
International
|
Private Investment
|
Partner
|
Flavors and Fragrances, Inc
|
Cosmetic Production
|
Non-Executive Chairman of the Board of Directors
|
|
Sanjay K. Morey
|
Twin Ridge Capital
Harvest Sherwood Food Distributors
|
Private Investment
Food Distribution
|
Partner
Chairman
|
William P. Russell, Jr.
|
Twin Ridge Capital
|
Private Investment
|
Partner
|
Alison Burns
|
Twin Ridge Capital
Powell Communications
|
Private Investment
Public Relations
|
Senior Advisor
Senior Advisor
|
Paul Henrys
|
Feeding America
Global Food Banking Network
|
Hunger Relief
Hunger Relief
|
CFO and Treasurer
Board Member
|
Gary Pilnick
|
The Kellogg Company
|
Food Manufacturing
|
Vice Chairman, Corporate Development and Chief Legal Officer
|
• |
Our officers and directors are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a business combination
and their other businesses, on the other hand. We do not intend to have any full-time employees prior to the completion of our initial business combination. Each of our executive officers and directors is engaged in several other business
endeavors for which he is entitled to substantial compensation and has substantial time commitments, and our executive officers and directors are not obligated to contribute any specific number of hours per week to our affairs.
|
• |
Our Sponsor subscribed for founder shares prior to the date of this prospectus and will purchase private placement warrants in a transaction that closed simultaneously with our initial public offering.
|
• |
Our Sponsor and each member of our management team have entered into an agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares and public shares held by them in
connection with (i) the completion of our initial business combination and (ii) a shareholder vote to approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of
our obligation to provide holders of our Class A ordinary shares the right to have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination by the Termination Date or (B) with respect to any other provision relating to the rights of holders of our Class A ordinary shares.
|
Item 11. |
Executive Compensation
|
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
|
• |
each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
|
• |
each of our executive officers and directors that beneficially owns our ordinary share; and
|
• |
all our executive officers and directors as a group.
|
Class B ordinary shares
|
Class A ordinary shares
|
||||||||||||||||||||
Name and Address of
Beneficial Owner(1)
|
Number of
Shares
Beneficially
Owned
|
Appropriate
Percentage
of Class(2) |
Number of
Shares
Beneficially
Owned
|
Approximate
Percentage
of Class
|
Approximate
Percentage of
Voting
Control
|
||||||||||||||||
Twin Ridge Capital Sponsor, LLC(3)
|
5,267,203
|
(3)
|
99.9
|
-
|
-
|
19.8
|
%
|
||||||||||||||
Dale Morrison(3)
|
5,267,203
|
(3)
|
99.9
|
-
|
-
|
19.8
|
%
|
||||||||||||||
Sanjay K. Morey(3)
|
5,267,203
|
(3)
|
99.9
|
-
|
-
|
19.8
|
%
|
||||||||||||||
William P. Russell, Jr.(3)
|
5,267,203
|
(3)
|
99.9
|
-
|
-
|
19.8
|
%
|
||||||||||||||
Alison Burns
|
20,000
|
*
|
-
|
-
|
*
|
||||||||||||||||
Paul Henrys
|
20,000
|
*
|
-
|
-
|
*
|
||||||||||||||||
Gary Pilnick
|
20,000
|
*
|
-
|
-
|
*
|
||||||||||||||||
All officers and directors as a group (6 individuals)
|
5,327,203
|
(3)
|
100
|
-
|
-
|
20.0
|
%
|
||||||||||||||
Glazer Capital, LLC
|
-
|
-
|
1,874,771
|
(4)
|
8.8
|
%
|
7.04
|
%
|
* |
Less than one percent.
|
(1) |
Unless otherwise noted, the business address of each of the following is 999 Vanderbilt Beach Road, Suite 200, Naples, Florida.
|
(2) |
Interests shown consist solely of founder shares, classified as Class B ordinary shares. Such shares will automatically convert into Class A ordinary shares at the time of the consummation of our initial business combination on a
one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities.”
|
(3) |
Twin Ridge Capital Sponsor, LLC is the record holder of the shares reported herein. Twin Ridge Capital Sponsor, LLC is controlled by Dale Morrison, Sanjay K. Morey and William P. Russell, Jr. Each of Dale Morrison, Sanjay K. Morey and
William P. Russell Jr. disclaims any beneficial ownership of the securities held by our Sponsor other than to the extent of any pecuniary interest he may have therein, directly or indirectly.
|
(4) |
Includes Class A ordinary shares beneficially held by Glazer Capital, LLC, a Delaware limited liability company (“Glazer Capital”), and certain funds and managed accounts to which Glazer Capital serves
as investment manager (collectively, the “Glazer Funds”), and Paul J. Glazer, who serves as the Managing Member of Glazer Capital, with respect to the Class A ordinary shares held by the Glazer Funds. The address of the business
office of each of the Reporting Persons is 250 West 55th Street, Suite 30A, New York, New York 10019.
|
Item 13. |
Certain Relationships and Related Transactions, and Director Independence
|
Item 14. |
Principal Accountant Fees and Services
|
Item 15. |
Exhibits, Financial Statement Schedules
|
(1) |
Financial Statements
|
Page
|
|
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 688)
|
F-2
|
Balance Sheets
|
F-3
|
Statements of Operations
|
F-4
|
Statements of Changes in Shareholders’ Deficit
|
F-5
|
Statements of Cash Flows
|
F-6
|
Notes to Financial Statements
|
F‑7 to F-21
|
(2) |
Financial Statement Schedules: None
|
(3) |
Exhibits
|
Exhibit
No.
|
|
Description
|
2.1
|
|
|
2.2
|
|
|
3.1
|
|
|
3.2 |
||
4.1
|
|
|
|
Description of Company’s Securities.
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
|
Certification of the Co-Chief Executive Officer required by Rules 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
Certification of the Co-Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Co-Chief Executive Officer required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Co-Chief Executive Officer and Chief Financial Officer required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS*
|
iXBRL Instance Document.
|
101.SCH*
|
iXBRL Taxonomy Extension Schema.
|
101.CAL*
|
iXBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF*
|
iXBRL Taxonomy Extension Definition Linkbase.
|
101.LAB*
|
iXBRL Taxonomy Extension Label Linkbase.
|
101.PRE*
|
iXBRL Taxonomy Extension Presentation Linkbase.
|
104*
|
Cover Page Interactive Data File (embedded within the iXBRL document and contained in Exhibit 101).
|
* |
Filed herewith
|
** |
Furnished herewith
|
(1) |
Incorporated by reference to the registrant’s Current Report on Form 8-K, filed with the SEC on March 9, 2021.
|
(2)
|
Incorporated by reference to the registrant’s Current Report on Form 8-K, filed with the SEC on November 30, 2022.
|
(3)
|
Incorporated by reference to the registrant’s Current Report on Form 8-K, filed with the SEC on March 10, 2023.
|
Item 16. |
Form 10-K Summary
|
TWIN RIDGE CAPITAL ACQUISITION CORP.
|
|
/s/ Sanjay K. Morey |
|
Name: Sanjay K. Morey
|
|
Title: Co-Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
/s/ Dale Morrison
|
April 4, 2023
|
|
Dale Morrison
|
Chairman
|
|
/s/ Sanjay K. Morey
|
April 4, 2023
|
|
Sanjay K. Morey
|
Co-Chief Executive Officer, President and Director(Principal Executive Officer)
|
|
/s/ William P. Russell, Jr.
|
Co-Chief Executive Officer, Chief Financial Officer and Director (Principal Financial and Accounting Officer)
|
April 4, 2023
|
William P. Russell, Jr.
|
||
/s/ Alison Burns
|
Director
|
April 4, 2023
|
Alison Burns
|
||
/s/ Paul Henrys
|
Director
|
April 4, 2023
|
Paul Henrys
|
||
/s/ Gary Pilnick
|
Director
|
April 4, 2023
|
Gary Pilnick
|
Page |
|
Report of Independent Registered Public Accounting Firm (PCAOB ID No. )
|
F-2
|
Financial Statements: | |
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7 to F-21
|
December 31,
2022
|
December 31,
2021
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | $ | ||||||
Prepaid expenses
|
||||||||
Due from related party, net
|
||||||||
Total Current Assets
|
||||||||
Prepaid expenses, non-current
|
||||||||
Marketable securities held in Trust Account
|
||||||||
Total Assets
|
$ | $ | ||||||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption, and Shareholders’ Deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | $ | ||||||
Due to related party, net
|
||||||||
Total Current Liabilities
|
||||||||
Warrant liability
|
||||||||
Commitment fee shares liability |
||||||||
Deferred underwriting discount
|
||||||||
Total Liabilities
|
||||||||
Commitments and Contingencies (Note 7) | ||||||||
Class A Ordinary Shares Subject to Possible Redemption |
||||||||
Class A ordinary shares subject to possible redemption,
|
||||||||
Shareholders’ Deficit:
|
||||||||
Preference shares, $
|
||||||||
Class A ordinary shares, $
|
||||||||
Class B ordinary shares, $
|
||||||||
Additional paid-in capital
|
||||||||
Accumulated deficit
|
( |
) | ( |
) | ||||
Total Shareholders’ Deficit
|
( |
) | ( |
) | ||||
Total Liabilities and Shareholders’ Deficit
|
$ | $ |
For the Year Ended
December 31, 2022
|
For the
Period from
January 7,
2021
(Inception)
through
December 31,
2021
|
|||||||
Formation and operating costs
|
$ | $ | ||||||
Loss from operations
|
( |
) | ( |
) | ||||
Other income (expense):
|
||||||||
Warrant issuance costs
|
( |
) | ||||||
Change in fair value of warrant liability
|
||||||||
Change in fair value of over-allotment liability
|
||||||||
Fair value of commitment fee shares liability | ( |
) | ||||||
Trust interest income
|
||||||||
Other income attributable to derecognition of
deferred underwriting fee allocated to offering costs
|
||||||||
Total other income, net
|
||||||||
Net income
|
$
|
|
$ | |||||
Basic and diluted weighted average shares outstanding, ordinary share subject to redemption
|
||||||||
Basic and diluted net income per share
|
$
|
|
$ | |||||
Basic and diluted weighted average shares outstanding, ordinary share
|
|
|||||||
Basic and diluted net income per share
|
$
|
|
$ |
Class A
Ordinary Shares
|
Class B
Ordinary Shares
|
Additional
Paid-in
|
Accumulated
|
Total
Shareholders’
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||||||||
Balance – January 7, 2021 (inception)
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Class B ordinary shares issued to Sponsor
|
|
|
|
|
|
|||||||||||||||||||||||
Proceeds received in excess of fair value of private placement warrants
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Forfeiture of Class B ordinary shares
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|||||||||||||||||||
Initial classification of Over-allotment liability
|
- |
- |
( |
) | ( |
) | ||||||||||||||||||||||
Partial exercise of Over-allotment liability
|
- |
- |
||||||||||||||||||||||||||
Accretion of Class A Ordinary Shares to redemption value
|
-
|
|
-
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|||||||||||||||||||||
Balance – December 31, 2021
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||
Waived deferred underwriting discount
|
- | - | ||||||||||||||||||||||||||
Remeasurement for Class A Ordinary Shares to redemption value
|
- | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Net income
|
- | - | ||||||||||||||||||||||||||
Balance – December 31, 2022
|
$ | $ | $ | $ | ( |
) | $ | ( |
) |
For the Year Ended
December 31, 2022
|
For the Period
from
January 7,
2021
(Inception) through
December 31,
2021
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
|
$ | |||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Trust interest income
|
(
|
)
|
( |
) | ||||
Change in fair value of warrant liability
|
(
|
)
|
( |
) | ||||
Change in fair value of over-allotment liability
|
( |
) | ||||||
Fair value of commitment fee shares liability
|
||||||||
Warrant issuance costs
|
|
|||||||
Other income
|
( |
) | ||||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
|
( |
) | |||||
Accounts payable
|
|
|||||||
Due from related party
|
( |
) | ||||||
Due to related party
|
(
|
)
|
||||||
Net cash used in operating activities
|
(
|
)
|
( |
) | ||||
Cash Flows from Investing Activities:
|
||||||||
Marketable securities held in Trust Account
|
|
( |
) | |||||
Net cash used in investing activities
|
|
( |
) | |||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from Initial Public Offering, net of underwriters’ fees
|
|
|||||||
Proceeds from private placement
|
|
|||||||
Proceeds from issuance of founder shares
|
|
|||||||
Repayments to promissory note to related party
|
|
( |
) | |||||
Payment of offering costs
|
|
( |
) | |||||
Net cash provided by financing activities
|
|
|||||||
Net Change in Cash
|
(
|
)
|
||||||
Cash – Beginning
|
|
|||||||
Cash – Ending
|
$
|
|
$ | |||||
Non-Cash Investing and Financing activities:
|
||||||||
Deferred underwriting commissions charged to additional paid in capital
|
$
|
|
$ | |||||
Remeasurement of Class A ordinary shares subject to possible redemption
|
$
|
|
$ | |||||
Waived deferred underwriting discount |
$ | $ | ||||||
Initial classification of warrant liability
|
$
|
|
$ | |||||
Deferred offering costs by Sponsor loan
|
$
|
|
$ |
● |
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.
|
Gross proceeds from IPO
|
$
|
|
||
Less:
|
||||
Proceeds allocated to Public Warrants
|
(
|
)
|
||
Class A ordinary shares issuance costs
|
(
|
)
|
||
Plus:
|
||||
Accretion of carrying value to redemption value
|
|
|||
Remeasurement of carrying value to redemption value |
||||
Class A ordinary shares subject to
possible redemption - December 31, 2021
|
|
|
||
Plus: |
||||
Remeasurement of carrying value to redemption value |
||||
Class A ordinary shares subject to possible redemption - December 31, 2022
|
$ |
For the Year Ended
December 31, 2022
|
For the Period from January 7, 2021
(Inception) through December 31, 2021
|
|||||||||||||||
Class A | Class B |
Class A
|
Class B
|
|||||||||||||
Basic and diluted net income per ordinary share:
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Allocation of net income
|
$ | $ |
$
|
|
$
|
|
||||||||||
Denominator:
|
||||||||||||||||
Weighted-average shares outstanding
|
|
|
||||||||||||||
Basic and diluted net income per ordinary share
|
$ |
$ |
$
|
|
$
|
|
● | in whole and not in part; |
● | at a price of $ |
● | upon a
minimum of |
● | if, and
only if, the closing price of the Class A ordinary shares equals or exceeds $ |
● | in whole and not in part; |
● | at $ |
● | if, and
only if, the closing price of the Company’s Class A ordinary shares equals or exceeds $ |
● | if the
closing price of the Class A ordinary shares for any |
December 31,
2022
|
Quoted
Prices In
Active
Markets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Marketable securities held in Trust Account
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant Liability –Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Warrant Liability – Private Placement Warrants
|
|
|
|
|
||||||||||||
Commitment fee shares liability |
||||||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
December 31,
2021
|
Quoted
Prices In
Active
Markets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Other
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Assets:
|
||||||||||||||||
Marketable securities held in Trust Account
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||
Liabilities:
|
||||||||||||||||
Warrant Liability –Public Warrants
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Warrant Liability – Private Placement Warrants
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
Input
|
December 31, 2022 |
December 31,
2021
|
||||||
Expected term (years)
|
|
|||||||
Expected volatility
|
% |
% |
||||||
Risk-free interest rate
|
% |
% |
||||||
Fair value of the ordinary share price
|
$ |
$
|
|
December 31, 2022 | ||||
Fair value as of January 1, 2022
|
$ | |||
Revaluation of warrant liability included in other income within the statements of operations
|
( |
) | ||
Fair value as of December 31, 2022
|
$
|
|
December 31, 2021 | ||||
Fair value as of January 7, 2021 (inception)
|
$
|
|
||
Initial fair value of warrant liability upon issuance at IPO
|
|
|||
Initial fair value of warrant liability upon issuance at over-allotment
|
|
|||
Transfer out of Level 3 to Level 1
|
(
|
)
|
||
Revaluation of warrant liability included in other income within the statements of operations
|
(
|
)
|
||
Fair value as of December 31, 2021
|
$
|
|
Input
|
November 28, 2022
(Initial
Measurement)
|
December 31,
2022
|
||||||
Expected term (years)
|
|
|||||||
Risk-free interest rate
|
|
%
|
% | |||||
Fair value of the ordinary share price
|
$
|
|
$ |
• |
“amended and restated memorandum and article of association” means the amended and restated memorandum and articles of association that the Company adopted prior to the consummation of our initial public offering, as amended by special
resolution dated March 6, 2023;
|
• |
“Companies Act” are to the Companies Act (As Revised) of the Cayman Islands as the same may be amended from time to time;
|
• |
“Class A ordinary shares” means our shares of Class A ordinary shares, par value $0.0001 per share;
|
• |
“Class B ordinary shares” are to our shares of Class B ordinary shares, par value $0.0001 per share;
|
• |
“founder shares” means the 5,327,203 Class B ordinary shares issued and outstanding;
|
• |
“Industry Advisors” means Tom Bené, John Bryant, Mike Duffy, Steve Louden, Christopher O’Leary, Mike Polk and Bill Toler;
|
• |
“initial shareholders” means all of our shareholders immediately prior to the date of this report, including all of our officers, Industry Advisors and directors to the extent they hold ordinary shares;
|
• |
“initial public offering” refers to our initial public offering consummated on March 8, 2021;
|
• |
“management” or our “management team” are to our executive officers and directors;
|
• |
“ordinary shares” are to our Class A ordinary shares and our Class B ordinary shares;
|
• |
“private placement warrants” means the warrants exercisable for one Class A ordinary share at a price of $11.50 per share issued to the Sponsor simultaneously with the closing of our initial public offering and concurrently with the
partial exercise of the underwriters’ over-allotment after our initial public offering in separate private placements at a price of $1.50 per warrant;
|
• |
“public warrants” means the warrants included in the units issued in our initial public offering, each whole warrant being exercisable for one Class A ordinary share at an exercise price of $11.50 per share;
|
• |
“public shares” means our Class A ordinary shares sold as part of the units in our initial public offering (whether they were purchased in our initial public offering or thereafter in the open market);
|
• |
“public shareholders” means the holders of our public shares, including our Sponsor and management team to the extent our Sponsor and/or members of our management team purchase public shares, provided that our Sponsor’s and each member
of our management team’s status as a “public shareholder” will only exist with respect to such public shares;
|
• |
“Sponsor” means Twin Ridge Capital Sponsor LLC, a Delaware limited liability company;
|
• |
“warrants” are to our redeemable warrants, which includes the public warrants as well as the private placement warrants to the extent that they are no longer held by our sponsor or their permitted transferees; and
|
• |
“we,” “us,” “our,” “company” or “our company” are to Twin Ridge Capital Acquisition Corp., a Cayman Islands exempted company.
|
• |
6,266,645 Class A ordinary shares underlying the units issued as part of this offering; and
|
• |
5,327,203 Class B ordinary shares held by our initial shareholders.
|
• |
in whole and not in part;
|
• |
at a price of $0.01 per warrant;
|
• |
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
|
• |
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the
heading “—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within a 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders.
|
• |
in whole and not in part;
|
• |
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by
reference to the table below, based on the redemption date and the “fair market value” of our Class A ordinary shares (as defined below) except as otherwise described below;
|
• |
if, and only if, the closing price of our Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under
the heading “—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”) for any 20 trading days within the 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and
|
• |
if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than
$18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants—Public Shareholders’ Warrants—Anti-Dilution Adjustments”), the private
placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above.
|
Redemption Date
(period to expiration of warrants)
|
|
Fair Market Value of Class A Ordinary Shares
|
||||||||||||||||
|
≤$10.00
|
|
$11.00
|
|
$12.00
|
|
$13.00
|
|
$14.00
|
|
$15.00
|
|
$16.00
|
|
$17.00
|
|
≥$18.00
|
|
60 months
|
|
0.261
|
|
0.281
|
|
0.297
|
|
0.311
|
|
0.324
|
|
0.337
|
|
0.348
|
|
0.358
|
|
0.361
|
57 months
|
|
0.257
|
|
0.277
|
|
0.294
|
|
0.310
|
|
0.324
|
|
0.337
|
|
0.348
|
|
0.358
|
|
0.361
|
54 months
|
|
0.252
|
|
0.272
|
|
0.291
|
|
0.307
|
|
0.322
|
|
0.335
|
|
0.347
|
|
0.357
|
|
0.361
|
51 months
|
|
0.246
|
|
0.268
|
|
0.287
|
|
0.304
|
|
0.320
|
|
0.333
|
|
0.346
|
|
0.357
|
|
0.361
|
48 months
|
|
0.241
|
|
0.263
|
|
0.283
|
|
0.301
|
|
0.317
|
|
0.332
|
|
0.344
|
|
0.356
|
|
0.361
|
45 months
|
|
0.235
|
|
0.258
|
|
0.279
|
|
0.298
|
|
0.315
|
|
0.330
|
|
0.343
|
|
0.356
|
|
0.361
|
42 months
|
|
0.228
|
|
0.252
|
|
0.274
|
|
0.294
|
|
0.312
|
|
0.328
|
|
0.342
|
|
0.355
|
|
0.361
|
39 months
|
|
0.221
|
|
0.246
|
|
0.269
|
|
0.290
|
|
0.309
|
|
0.325
|
|
0.340
|
|
0.354
|
|
0.361
|
36 months
|
|
0.213
|
|
0.239
|
|
0.263
|
|
0.285
|
|
0.305
|
|
0.323
|
|
0.339
|
|
0.353
|
|
0.361
|
33 months
|
|
0.205
|
|
0.232
|
|
0.257
|
|
0.280
|
|
0.301
|
|
0.320
|
|
0.337
|
|
0.352
|
|
0.361
|
30 months
|
|
0.196
|
|
0.224
|
|
0.250
|
|
0.274
|
|
0.297
|
|
0.316
|
|
0.335
|
|
0.351
|
|
0.361
|
27 months
|
|
0.185
|
|
0.214
|
|
0.242
|
|
0.268
|
|
0.291
|
|
0.313
|
|
0.332
|
|
0.350
|
|
0.361
|
24 months
|
|
0.173
|
|
0.204
|
|
0.233
|
|
0.260
|
|
0.285
|
|
0.308
|
|
0.329
|
|
0.348
|
|
0.361
|
21 months
|
|
0.161
|
|
0.193
|
|
0.223
|
|
0.252
|
|
0.279
|
|
0.304
|
|
0.326
|
|
0.347
|
|
0.361
|
18 months
|
|
0.146
|
|
0.179
|
|
0.211
|
|
0.242
|
|
0.271
|
|
0.298
|
|
0.322
|
|
0.345
|
|
0.361
|
15 months
|
|
0.130
|
|
0.164
|
|
0.197
|
|
0.230
|
|
0.262
|
|
0.291
|
|
0.317
|
|
0.342
|
|
0.361
|
12 months
|
|
0.111
|
|
0.146
|
|
0.181
|
|
0.216
|
|
0.250
|
|
0.282
|
|
0.312
|
|
0.339
|
|
0.361
|
9 months
|
|
0.090
|
|
0.125
|
|
0.162
|
|
0.199
|
|
0.237
|
|
0.272
|
|
0.305
|
|
0.336
|
|
0.361
|
6 months
|
|
0.065
|
|
0.099
|
|
0.137
|
|
0.178
|
|
0.219
|
|
0.259
|
|
0.296
|
|
0.331
|
|
0.361
|
3 months
|
|
0.034
|
|
0.065
|
|
0.104
|
|
0.150
|
|
0.197
|
|
0.243
|
|
0.286
|
|
0.326
|
|
0.361
|
0 months
|
|
—
|
|
—
|
|
0.042
|
|
0.115
|
|
0.179
|
|
0.233
|
|
0.281
|
|
0.323
|
|
0.361
|
• |
we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;
|
• |
the shareholders have been fairly represented at the meeting in question;
|
• |
the arrangement is such as a businessman would reasonably approve; and
|
• |
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority.”
|
• |
a company is acting, or proposing to act, illegally or beyond the scope of its authority;
|
• |
the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or
|
• |
those who control the company are perpetrating a “fraud on the minority.”
|
• |
an exempted company does not have to file an annual return of its shareholders with the Register of Companies;
|
• |
an exempted company’s register of members is not open to inspection;
|
• |
an exempted company does not have to hold an annual shareholder meeting;
|
• |
an exempted company may issue shares with no par value;
|
• |
an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);
|
• |
an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
|
• |
an exempted company may register as a limited duration company; and
|
• |
an exempted company may register as a segregated portfolio company.
|
• |
If we have not consummated an initial business combination by the Termination Date, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to
us to pay our taxes that were paid by us or are payable by us, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining
shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law;
|
• |
Prior to or in connection with our initial business combination, we may not issue additional securities that would entitle the holders thereof to (i) receive funds from the trust account or (ii) vote as a class with our public shares (a)
on our initial business combination or on any other proposal presented to shareholders prior to or in connection with the completion of an initial business combination or (b) to approve an amendment to our amended and restated memorandum
and articles of association to (x) extend the time we have to consummate a business combination beyond the Termination Date or (y) amend the foregoing provisions;
|
• |
Although we do not intend to enter into a business combination with a target business that is affiliated with our sponsor, our directors, our officers or our Industry Advisors, we are not prohibited from doing so. In the event we enter
into such a transaction, we, or a committee of independent directors, will obtain an opinion from independent investment banking firm or another independent entity that commonly renders valuation opinions that such a business combination is
fair to our company from a financial point of view;
|
• |
If a shareholder vote on our initial business combination is not required by applicable law or stock exchange listing requirements and we do not decide to hold a shareholder vote for business or other reasons, we will offer to redeem our
public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other
information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act;
|
• |
So long as our securities are then listed on the NYSE, our initial business combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the trust
account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income earned on the trust account) at the time of the agreement to enter into the initial business combination;
|
• |
If our shareholders approve an amendment to our amended and restated memorandum and articles of association (A) that would modify the substance or timing of our obligation to provide holders of our Class A ordinary shares the right to
have their shares redeemed in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination by the Termination Date or (B) with respect to any other provision
relating to the rights of holders of our Class A ordinary shares, we will provide our public shareholders with the opportunity to redeem all or a portion of their ordinary shares upon such approval at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes, if any, divided by the number of the then-outstanding
public shares, subject to the limitations described herein; and
|
• |
We will not effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.
|
• |
1% of the total number of ordinary shares then-outstanding, which equals 115,938 shares immediately after our initial public offering; or
|
• |
the average weekly reported trading volume of the Class A ordinary shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
• |
the issuer of the securities that was formerly a shell company has ceased to be a shell company;
|
• |
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
• |
the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding twelve months (or such shorter period that the issuer was required to file such reports and
materials), other than Form 8-K reports; and
|
• |
at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
Date: April 4, 2023
|
/s/ Sanjay K. Morey
|
|
Sanjay K. Morey
|
||
Co-Chief Executive Officer and President
|
Date: April 4, 2023
|
/s/ William P. Russell, Jr.
|
|
William P. Russell, Jr.
|
||
Co-Chief Executive Officer and Chief Financial Officer
|
Date: April 4, 2023
|
/s/ Sanjay K. Morey
|
|
Sanjay K. Morey
|
||
Co-Chief Executive Officer and President
|
Date: April 4, 2023
|
/s/ William P. Russell, Jr.
|
|
William P. Russell, Jr.
|
||
Co-Chief Executive Officer and Chief Financial Officer
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Mar. 31, 2023 |
Jun. 30, 2022 |
|
Entity Listings [Line Items] | |||
Document Type | 10-K/A | ||
Amendment Flag | true | ||
Amendment Description | We are filing this Amendment No. 1 to Annual Report on Form 10-K/A (this “Amendment”) to amend our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2023 (the “10-K”). This Amendment is being filed solely to correct for an inadvertent omission of disclosure under Item 3 and Note 9 in the Notes to Financial Statements, which due to an inadvertent error that occurred during the edgarization process and final submission of the 10-K by the printer was not included. The 10-K filed on March 31, 2023 was not the correct version that was approved by the board of directors and management of Twin Ridge Capital Acquisition Corp. (the “Company”) and our independent registered public accounting firm, Marcum LLP. No attempt has been made in this Amendment to otherwise modify or update the other disclosures presented in the 10-K. This Amendment does not reflect events occurring after the filing of the original 10-K (i.e., those events occurring after March 31, 2023) or modify of update those disclosures that may be affected by subsequent events. Such subsequent matters are addressed in subsequent reports filed with the SEC. Accordingly, this Amendment should be read in conjunction with the 10-K and our other filings with the SEC. | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Transition Report | false | ||
Entity Registrant Name | TWIN RIDGE CAPITAL ACQUISITION CORP. | ||
Entity Central Index Key | 0001840353 | ||
Entity Incorporation, State or Country Code | E9 | ||
Entity File Number | 001-40157 | ||
Entity Tax Identification Number | 98-1577338 | ||
Entity Address, Address Line One | 999 Vanderbilt Beach Road, Suite 200 | ||
Entity Address, City or Town | Naples | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 34108 | ||
City Area Code | 212 | ||
Local Phone Number | 235-0292 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | true | ||
Entity Public Float | $ 209,039,455 | ||
Auditor Firm ID | 688 | ||
Auditor Name | Marcum LLP | ||
Auditor Location | New York, NY | ||
Units [Member] | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-third of one redeemable warrant | ||
Trading Symbol | TRCA.U | ||
Security Exchange Name | NYSE | ||
Class A Ordinary Shares [Member] | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Class A ordinary shares included as part of the units | ||
Trading Symbol | TRCA | ||
Security Exchange Name | NYSE | ||
Entity Common Stock, Shares Outstanding | 6,266,645 | ||
Redeemable Warrants [Member] | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Warrants included as part of the Units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50 | ||
Trading Symbol | TRCA WS | ||
Security Exchange Name | NYSE | ||
Class B Ordinary Shares [Member] | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 5,327,203 |
ORGANIZATION AND BUSINESS OPERATIONS |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
ORGANIZATION AND BUSINESS OPERATIONS [Abstract] | |
ORGANIZATION AND BUSINESS OPERATIONS |
NOTE 1. ORGANIZATION
AND BUSINESS OPERATIONS
Organization and
General
Twin Ridge Capital Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on January 7, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, recapitalization, reorganization or similar Business Combination with one or more businesses or entities (the “Business Combination”). The Company will not be limited to a particular industry or geographic region
in its identification and acquisition of a target company. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.
The Company has selected December 31 as
its fiscal year end.
As of December 31, 2022, the Company had not commenced any operations. All activity for the period from January 7, 2021
(inception) through December 31, 2022 relates to the Company’s formation and the Initial Public Offering (“IPO”) described below, and, since the closing of the IPO (as defined below), the search for a prospective initial Business
Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and
cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liabilities and other financial instruments as other income (expense).
The Company’s sponsor is Twin Ridge
Capital sponsor, LLC, a Delaware limited liability company (the “Sponsor”).
Financing
The registration statement for the
Company’s IPO was declared effective on March 3, 2021 (the “Effective Date”). On March 8, 2021, the Company consummated the IPO of 20,000,000
units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per
Unit, generating gross proceeds of $200,000,000, which is discussed in Note 3.
Simultaneously with the closing of the
IPO, the Company consummated the sale of 4,933,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $7,400,000, which is discussed in Note 4.
Transaction costs amounted to $11,551,318 consisting of $4,000,000
of underwriting discount, $7,000,000 of deferred underwriting discount, and $551,318 of other offering costs.
The Company granted the underwriters in
the IPO a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments, if any. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813 Units (the “Over-allotment Units”), generating an aggregate of gross proceeds of $13,088,130, and incurred $261,764 in cash underwriting fees and $458,085 in deferred underwriting fees.
Trust Account
Following the closing of the IPO on
March 8, 2021 and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was
placed in a Trust Account, which can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only
in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the Company’s amended and restated memorandum and
articles of association, as discussed below and subject to the requirements of law and regulation, provide that the proceeds from the IPO and the sale of the Private Placement Warrants held in the Trust Account will not be released from the
Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the Company’s public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection
with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the
Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with
the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete its initial
Business Combination within 24 months from the closing of the IPO ( the “Combination Period” ) or (B) with respect to any other
provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the Company’s public shares if the Company has not consummated its Business Combination within the Combination Period, subject to applicable
law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an
initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination Period, with respect to such Class A ordinary shares so redeemed. The proceeds deposited in the Trust Account
could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.
Initial Business
Combination
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust
Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public
shareholders own shares will own or acquire 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 of 1940, as amended, or the Investment Company Act. There is no assurance that the Company will be
able to complete a Business Combination successfully.
The ordinary shares subject to
redemption are recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480
“Distinguishing Liabilities from Equity.”
If the Company has not consummated an
initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than
business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including
interest earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes, if any (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation
distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in the case of
clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.The Sponsor, officers and directors have
agreed to (i) waive their redemption rights with respect to their Founder Shares (as described in Note 5), (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to
approve an amendment to the Company’s amended and restated memorandum and articles of association, (iii) waive their rights to liquidating distributions from the Trust Account with respect any Founder Shares they hold if the Company fails to
consummate an initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its
initial Business Combination within the Combination Period), and (iv) vote their Founder Shares and public shares in favor of the initial Business Combination.
The Sponsor has agreed that it will be
liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which
the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00
per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s tax obligations, provided that such liability will not apply to
any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against
certain liabilities, including liabilities under the Securities Act of 1933, as amended, (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently
verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to
satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Proposed Carbon Revolution Business Combination
Business Combination Agreement and Scheme Implementation Deed
On November 29, 2022, the Company,
Carbon Revolution Limited, an Australian public company with Australian Company Number (I) 128 274 653 listed on the Australian Securities Exchange (“Carbon Revolution”), Carbon Revolution Limited (formerly known as Poppetell Limited), a
private limited company incorporated in Ireland with registered number 607450 (“MergeCo”), and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of MergeCo (“Merger Sub” and, together with SPAC, the Company
and MergeCo, collectively, the “Parties” and each a “Party”), entered into a business combination agreement (as it may be amended or supplemented from time to time, the “Business Combination Agreement”), and on November 30, 2022, Carbon
Revolution, the Company and MergeCo entered into a Scheme Implementation Deed (as it may be amended or supplemented from time to time, the “Scheme Implementation Deed”).
Under the Scheme Implementation Deed,
Carbon Revolution has agreed to propose a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (the “Scheme”) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) which, if implemented, will result in
all shares of Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing a share to MergeCo (resulting in Carbon Revolution becoming a wholly-owned subsidiary of MergeCo) and MergeCo issuing shares to the
shareholders of Carbon Revolution, subject to approval from Carbon Revolution’s shareholders, approval of the Federal Court of Australia and the satisfaction of various other conditions (a full list of the conditions is set out in the Scheme
Implementation Deed).
The Business Combination Agreement
provides for the business combination, pursuant to which, among other things, the Company shall be merged with and into MergerSub, with Merger Sub surviving as a wholly-owned subsidiary of MergeCo (the “Surviving Company”), (the “Merger”).
The Transaction will be consummated
subject to the deliverables and provisions as further described in the Business Combination Agreement.
Related Agreements
Sponsor Side Letter
Concurrently with the execution of the
Business Combination Agreement and the Scheme Implementation Deed, the Sponsor, TRCA Subsidiary, Alison Burns (“Burns”), Paul Henrys (“Henrys”) and Gary Pilnick (“Pilnick” together with Burns and Henrys, the “Independent Directors”) and Dale
Morrison (“Morrison”), Sanjay K. Morey (“Morey”) and William P. Russell, Jr. (“Russell”, and together with Morrison and Morey, the “Other Insiders”, and together with Sponsor, TRCA Subsidiary and the Independent Directors, the “Sponsor
Parties”), the Company, Carbon Revolution and MergeCo entered into a Sponsor Side Letter (the “Sponsor Side Letter”), pursuant to which the Sponsor Parties have agreed to take, or not take, certain actions during the period between the
execution of the Sponsor Side Letter and the consummation of the Merger, including, (i) to vote any ordinary shares of the Company owned by such Sponsor Party (all such shares, the “Covered Shares”) in favor of the Merger and the Scheme and
other related proposals at the shareholders’ meeting of the Company, and any other special meeting of the Company’s shareholders called for the purpose of soliciting stockholder approval in connection with the consummation of the Merger and
the Scheme, (ii) to waive the anti-dilution rights or similar protections with respect to the Class B ordinary shares owned by such party as set forth in the governing documents of the Company, or otherwise, and (iii) not to redeem any
Covered Shares (as defined in the Sponsor Side Letter) owned by such Sponsor Party.
Pursuant to the Sponsor Side Letter,
Sponsor has also agreed that, immediately prior to the consummation of the Merger, and conditioned upon the consummation of the Merger, 327,203
of the 5,267,203 Class B ordinary shares beneficially owned by Sponsor shall be automatically forfeited and surrendered to the
Company for no additional consideration.
Standby Equity Purchase Agreement
Concurrently with the parties entering
into the Business Combination Agreement and Scheme Implementation Deed, the Company entered into a Standby Equity Purchase Agreement (the “CEF”) with YA II PN, Ltd. (“Yorkville”) pursuant to which, subject to the consummation of the
Transactions, MergeCo has the option, but not the obligation, to issue, and Yorkville shall subscribe for, an aggregate amount of up to $60
million of MergeCo Ordinary Shares at the time of MergeCo’s choosing during the term of the agreement, subject to certain limitations, including caps on exchanges, issuances and subscriptions based on trading volumes. Each advance under the
CEF (an “Advance”) may be in an amount of MergeCo Ordinary Shares up to the greater of $10 million or the aggregate daily trading
volume of MergeCo Ordinary Shares in the
trading days prior to MergeCo requesting an Advance. The purchase price for an
Advance is determined at the option of MergeCo and is either (a) 95% of the average daily VWAP (as defined below) during the
applicable one-day pricing period or (b) 97% of the lowest daily VWAP during the applicable consecutive trading day pricing
period. “VWAP” means, for any trading day, the daily volume weighted average price of MergeCo Ordinary Shares for such date on the securities listing exchange that the MergeCo Ordinary Shares are trading as of such date during regular
trading hours as reported by Bloomberg L.P. The CEF will continue for a term of three years commencing from the sixth trading day
following the closing of the Business Combination, unless prior terminated pursuant to its terms.Going Concern and
Liquidity
As of December 31, 2022, the Company had
approximately $1.0 million in its operating bank account, and working capital deficit of approximately $3.3 million.
Until the consummation of a Business
Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures,
selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.
The Company may need to raise further additional capital through loans or additional investments from its Sponsor, stockholders, officers,
directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the
Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could
include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on
commercially acceptable terms, if at all.
The Company has until June 8, 2023 to consummate an initial Business Combination. It is uncertain that the Company will be able to consummate an
initial Business Combination by June 8, 2023. If an initial business combination is not consummated by the liquidation date, there will be a mandatory liquidation and subsequent dissolution. Additionally, it is uncertain that we will have
sufficient liquidity to fund the working capital needs of the Company through June 8, 2023 or through twelve months from the issuance of this report. Management has determined that the liquidity condition through 12 months from the issuance
of this report and mandatory liquidation, should an initial business combination not occur, and potential subsequent dissolution raise 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 June 8, 2023.
Risks and
Uncertainties
Management continues to evaluate the
impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, cash flows and/or search for a target company,
the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
On February 24, 2022, Russian forces launched significant military action against Ukraine, and sustained conflict and disruption in the region is possible. The impact to Ukraine as well as actions taken by other
countries, including new and stricter sanctions imposed by Canada, the United Kingdom, the European Union, the United States, and other countries and companies and organizations against officials, individuals, regions, and industries in
Russia and Ukraine, and actions taken by Russia in response to such sanctions, and each country’s potential response to such sanctions, tensions, and military actions could have a material adverse effect on the Company’s ability to complete
the Business Combination. Any such material adverse effect from the conflict and enhanced sanctions activity may include reduced trading and business activity levels, disruption of financial markets, increased costs, disruption of services,
inability to complete financial or banking transactions, and inability to service existing or new customers in the region. Prolonged unrest, military activities, or broad-based sanctions, should they be implemented, could have a material
adverse effect on the Company’s ability to complete the Business Combination.
The Company is exposed to volatility in the banking market. At various times, we could have deposits with certain U.S. banks in excess of the
maximum amounts insured by the U.S. Federal Deposit Insurance Corporation (“FDIC”). On March 10, 2023, Silicon Valley Bank became insolvent. State regulators closed the bank and the Federal Deposit Insurance Corporation (“FDIC”) was
appointed as its receiver. The Company did not hold any deposits with Silicon Valley Bank as of December 31, 2022.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting
principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the
Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging
growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from
being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the
Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging
growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public
company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a
condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the future. One
of the more significant accounting estimates included in these statements are the warrant liabilities and commitment fee shares liability. Such estimates may be subject to change as more current information becomes available and accordingly
the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three
months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
Marketable Securities Held in Trust Account
At December 31, 2022 and 2021, the assets held in the Trust Account were held in
money market funds. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of investments held in Trust Account are included in interest income in the accompanying statements of operations. The estimated fair value of investments held in Trust Account are determined using available market
information.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or
paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized
within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The fair value of the Company’s certain assets and liabilities, which qualify as
financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses,
and due to related party are estimated to approximate the carrying values as of December 31, 2022 and 2021 due to the short maturities of such instruments.
The fair value of the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and
unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrants is
classified as level 3. The fair value of the commitment fee shares is based on a discounted cash flow model whereby the stock payment was discounted using risk free rates based on an
estimated settlement date. The fair value of the commitment fee shares liability is classified as level 3. See Note 6 for additional information on assets and liabilities measured at fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage. At December 31, 2022 and 2021, the Company has not experienced losses on this account and management
believes the Company is not exposed to significant risks on such account.
Ordinary Shares Subject to Possible Redemption
All of the 21,308,813 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares
in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of
association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption
to be classified outside of permanent equity. Therefore, all Class A ordinary shares has been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid
in capital and accumulated deficit.
As of December 31, 2022 and 2021, the Class A ordinary shares reflected on the
balance sheet are reconciled in the following table:
Net Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary
shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 12,210,780
potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the year ended December 31, 2022 and for the period from January 7, 2021 (inception) through December 31, 2021
because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods. The table below
presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff
Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are allocated to the separable
financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A ordinary shares are
charged to the shareholders’ deficit. The Company incurred offering costs amounting to $12,271,167 as a result of the IPO consisting of a $4,261,764 underwriting fee $7,458,085 of
deferred underwriting fees and $551,318 of other offering costs. The Company recorded $11,731,323 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $539,844 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities.
On November 15, 2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to
the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result, the Company recognized $323,385
of other income attributable to the derecognition of deferred underwriting fees allocated to offering costs and $7,134,700 was recorded
to additional paid-in capital in relation to the waiver of the deferred underwriting discount in the accompanying financial statements (see Note 7).
Warrant Liabilities
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The
assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC
815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and
as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to
be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statement of operations. The initial fair
value of the Private and Public Warrants were estimated using a Monte Carlo simulation (see Note 6).
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments are initially recorded at fair value on the grant date and re-valued at
each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end
of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Standby Equity Purchase Agreement Classification.
The Company accounts for its CEF as either equity-classified or liability-classified instruments based on an assessment of the agreement’s specific
terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the CEF is a freestanding financial instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the CEF
meets all of the requirements for equity classification under ASC 815, including whether the CEF is indexed to the Company’s Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of
professional judgment, is conducted at date of the agreement and as of each subsequent quarterly period end date while the CEF is outstanding. For an agreement that meets all of the criteria for equity classification, the CEF would be required to
be recorded as a component of additional paid-in capital at the time of issuance.
For an agreement that does not meet all the criteria for equity classification, the CEF would be required to be recorded at its initial fair value on
the date of issuance. The fair value of the CEF is remeasured at each balance sheet date with the change in the estimated fair value of the CEF recognized as a non-cash gain or loss on the statements of operations. The Company has analyzed the
CEF (as defined in Note 1) and determined it is considered to be a freestanding instrument and does not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. Based on the settlement terms of
the agreement, the CEF met the requirements for equity classification.
Commitment Fee Shares Liability
In connection with the Standby Equity Purchase Agreement, the Company agreed to issue Yorkville 15,000 of the
Company’s ordinary shares upon consummation of the Initial Business Combination. The Company recorded the fair value of the commitment fee shares liability on the balance sheets and the related expense on its statements of operations. The
initial fair value of the commitment fee shares liability was estimated using a discounted cash flow model (see Note 6).
Income Taxes
The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC
740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived
from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.
There were no unrecognized tax benefits as of December 31, 2022 and 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to
unrecognized tax benefits as income tax expense. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in
significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There is currently no taxation imposed on income by the Government of the Cayman
Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial
instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity
classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted
earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption
permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 on January 7, 2021 (Inception). The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any recently issued, but not effective, accounting
standards, if currently adopted, would have a material effect on the Company’s financial statements.
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INITIAL PUBLIC OFFERING |
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INITIAL PUBLIC OFFERING [Abstract] | |||||||||||||||||||||||||
INITIAL PUBLIC OFFERING |
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the IPO on March 8, 2021, the Company sold 20,000,000 Units at a price of $10.00
per Unit. Each Unit consists of one Class A ordinary share and
redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months
from the closing of the IPO, and will expire five years after the completion of the initial Business Combination or earlier upon
redemption or liquidation.On March 10, 2021, the underwriters partially exercised the over-allotment option to
purchase 1,308,813 Units. The aggregate Public Warrants outstanding pursuant to the IPO and the underwriters partially exercised the
over-allotment option are 7,102,938.
Following the closing of the IPO on March 8, 2021 and the underwriters’ partial
exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was placed in a Trust Account, which
can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury
obligations.
Public Warrants
Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50
per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business
Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective
issue price to be determined in good faith by the Company’s board of directors and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as
applicable, prior to such issuance (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60%
of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading
price of the Company’s Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the
Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of
the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and
the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable on the later of one year from the closing of the IPO or 30 days
after the completion of its initial Business Combination, and will expire five years after the completion of the Company’s initial
Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a
registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current
prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that, if the Company’s Class A ordinary shares are at the time of any exercise of a warrant not listed on
a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a
“cashless basis” in accordance with Section 3(a)(9) of the Securities Act, and in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th
day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement,
exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to
the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of
the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.
Once the warrants become exercisable, the Company may redeem
the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
Redemption of warrants when the price per Class A ordinary
share equals or exceeds $10.00.
Once the warrants become exercisable, the Company may redeem
the outstanding warrants:
|
PRIVATE PLACEMENT |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
PRIVATE PLACEMENT [Abstract] | |
PRIVATE PLACEMENT |
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 4,933,333 Private Placement Warrants at a price of $1.50
per Private Placement Warrant, for an aggregate purchase price of $7,400,000, in a private placement. The proceeds from the Private
Placement Warrants was added to the proceeds from the IPO held in the Trust Account.
Pursuant to the underwriters’ partial exercise of the over-allotment option on March
10, 2021, the Sponsor purchased an additional 174,509 Private Placement Warrants.
The Private Placement Warrants (including the Class A ordinary shares issuable upon
exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the
initial Business Combination and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on
a cashless basis. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders
on the same basis as the warrants included in the Units being sold in the IPO.
|
RELATED PARTY TRANSACTIONS |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS |
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On January 12, 2021, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain
offering costs in consideration for 5,750,000 Class B ordinary shares, par value $0.0001. Up to 750,000 Founder Shares are subject to forfeiture by
the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. On February 23, 2021, 20,000 shares
were transferred to each of the three independent directors. On March 10, 2021, the underwriters partially exercised the over-allotment
option to purchase 1,308,813 Units. As a result, 422,797 founder shares were forfeited on April 19, 2021.
In February 2021, the Sponsor transferred its interests representing a total of 60,000 Class B ordinary shares of the Company to three independent directors
of the Company for per share consideration equal to the amount paid by the Sponsor to the Company for each founder share. Pursuant to the terms of the agreements governing these transfers, if the transferee ceases to serve as a director of the
Company prior to the completion of the Company’s initial Business Combination, the Sponsor has the option to repurchase the founder shares from such transferee for the same per share consideration paid by the transferee for the initial transfer.
The Sponsor’s option to repurchase the founder shares shall expire upon the consummation of the Company’s initial Business Combination. The sale of the founders shares to the Company’s directors is in the scope of FASB ASC Topic 718,
“Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the shares sold to the Company’s directors was $300,490 or approximately $5.01 per share.
The founders’ shares were effectively sold subject to a performance condition (i.e., the occurrence of a Business Combination). Compensation expense related to the founders’ shares is recognized only when the performance condition is probable of
occurrence. As of December 31, 2022, the Company determined that a Business Combination is not considered probable, and, therefore, no
share-based compensation expense has been recognized. Share-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of
founders shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the founder shares.
The Sponsor, directors and executive officers have agreed not to transfer, assign or
sell any of their Founder Shares until the earliest of: (A) one year after the completion of the initial Business Combination and (B)
subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share
(as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading day period commencing at least 150
days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of its public shareholders having the right to exchange
their ordinary shares for cash, securities or other property (the “Lock-up”).
Advisory Agreement and Transfer of Founder Shares
On October 28, 2022, the Company and the Sponsor entered into a letter agreement
with DDGN Advisors, LLC (the “Advisor”), pursuant to which the Advisor agreed to provide certain advisory, diligence and other similar services to the Company and the Sponsor in connection with the potential business combination between the Company
and Carbon Revolution. As consideration for the Advisor’s performance of such services, the Sponsor agreed to transfer 3,350,000 of the
Company’s Class B ordinary shares beneficially owned by the Sponsor to the Advisor at the closing of the Business Combination. The transfer of the founders shares to the Advisor is in
the scope of ASC 718 whereby share-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the 3,350,000 shares to be transferred upon the consummation of the Company’s initial Business Combination is $16,386,643 or $4.89 per share. As of November 18, 2022, such shares were held
by TRCA Subsidiary, an entity that is controlled by the Sponsor, and would revert to the Sponsor if the Business Combination with Carbon Revolution is not completed.
Due from Related Party
The balance of $12,526 as of December 31, 2022 represents the $12,973 of taxes paid
by the Company on behalf of the Sponsor and advanced administrative service fee, net of the $447 operating expenses paid by the Sponsor on
behalf of the Company.
Due to Related Party
The balance of $222 as of December 31,
2021 represents operating expenses paid by the Sponsor on behalf of the Company.
Promissory Note — Related Party
On January 12, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the IPO. These loans are non-interest bearing, unsecured and are due at the earlier of November 30,
2021 or the closing of the IPO. During the period from January 12, 2021 through December 31, 2021, the Company had borrowed $60,094 under
the promissory note. On March 15, 2021, the Company paid the promissory note in full and overpaid $15,771, which was recorded as a
receivable from Sponsor on the balance sheet. The Sponsor returned the overpayment to the Company on May 10, 2021.
On March 10, 2023, the Company issued an unsecured promissory note in the total principal amount of up to $1,500,000 (the “Promissory Note”) to Carbon Revolution. The Promissory Note does not bear interest and matures upon closing of the Company’s initial business combination. In
the event that the Company does not consummate a business combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. The proceeds of the Promissory Note will be deposited in the Company’s trust
account. As of March 31, 2023, there was $480,000 outstanding under the Promissory Note.
Working Capital Loans
In order to finance transaction costs in connection with an intended Business
Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial
Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, such loans may be repaid only out of funds held outside the Trust Account. In the event that the
initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital
Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price
of $1.50 per warrant at the option of the lender. As of December 31, 2022, there were no such loan amounts outstanding. Such warrants would be identical to the Private Placement Warrants.
Administrative Service Fee
Commencing on the date that the Company’s securities are first listed on NYSE, the
Company will reimburse the Sponsor or an affiliate of the Sponsor for office space, secretarial and administrative services provided to members of the management team, in the amount of $10,000 per month. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. The Company incurred and
paid $120,000 and $100,000
for the year ended December 31, 2022 and 2021, respectively.
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FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS |
NOTE 6. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities
that were measured at fair value on a recurring basis as of December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
Transfers to/from Levels 1, 2 and 3 are
recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. The estimated fair value of the Public Warrants transferred from a Level 3 measurement to a Level 1 fair value measurement during
the period from January 7, 2021 through December 31, 2021 was $(6,440,945). There were no transfers in or out of Level 3 from other levels in the fair value hierarchy during the year ended December 31, 2021.
Public Warrants
The Company utilized a Monte Carlo simulation model for the initial valuation of the
Public Warrants.
The subsequent measurement of the Public Warrants at December 31, 2022 and 2021 is
classified as Level 1 due to the use of an observable market quote in an active market. As of December 31, 2022 and 2021, the aggregate value of Public Warrants was $213,799 and $4,261,763, respectively.
The estimated fair value of the Private Placement Warrants on December 31, 2022 and
2021 is determined using Level 3 inputs. Inherent in a Monte-Carlo simulation model are assumptions related to expected stock-price volatility (pre-merger and post-merger), expected term, dividend yield and risk-free interest rate. The Company
estimates the volatility of its ordinary shares based on management’s understanding of the volatility associated with instruments of other similar entities. The risk-free interest rate is based on the U.S. Treasury Constant Maturity similar to the
expected remaining life of the warrants. The expected life of the warrants is simulated based on management assumptions regarding the timing and likelihood of completing a business combination. The dividend rate is based on the historical rate, which
the Company anticipates to remain at zero.
The assumptions used in calculating the estimated fair values represent the
Company’s best estimate. However, inherent uncertainties are involved. If factors or assumptions change, the estimated fair values could be materially different.
The key inputs into the Monte Carlo simulation model for the warrant liability were
as follows:
The following table sets forth a summary of the changes in the fair value of the
Level 3 warrant liability for the year ended December 31, 2022 and 2021:
Commitment Fee Shares
The estimated fair value of the commitment fee shares liability on November 28, 2022 (initial measurement) is determined using Level 3 inputs. The
expected term was based on management assumptions regarding the timing and likelihood of completing a business combination. Management also estimated whether a business combination would be completed. The commitment fees shares liability is
discounted to net present values using risk free rates. Discount rates were based on current risk-free rates based on the actual simulated term using the following U.S. Treasury rates and using the linearly interpolated treasury rates between
quoted terms.
The assumptions used in calculating the estimated fair value represents the Company’s best estimate. However, inherent uncertainties are involved. If
factors or assumptions change, the estimated fair value could be materially different.
The key inputs into the present value model for the commitment fee shares liability were as follows:
The fair value of the commitment fee shares liability was $147,469
and is reflected on the Company’s balance sheet with the corresponding expense charged to other income (expense). The change in fair value from initial measurement on November 28, 2022 through December 31, 2022 was deemed to be de minimis and
therefore no change in fair value was recognized through December 31, 2022.
|
COMMITMENTS AND CONTINGENCIES |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 7. COMMITMENTS AND CONTINGENCIES
Registration and Shareholders Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that
may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to
registration rights pursuant to a registration and shareholder rights agreement signed on March 3, 2021. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent
to the Company’s completion of its initial Business Combination. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until
termination of the applicable Lock-up period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such
registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option from March 3, 2021 to purchase up to an additional 3,000,000
units to cover over-allotments.
On March 8, 2021, the Company paid a fixed underwriting discount of $4,000,000, which was calculated as two percent (2%)
of the gross proceeds of the IPO. Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross
proceeds of the IPO held in the Trust Account, or $7,000,000, upon the completion of the Company’s initial Business Combination.
On March 10, 2021, the underwriters partially exercised the over-allotment option to
purchase 1,308,813 units. The option to purchase the remaining 1,691,187 units was unexercised and expired on April 19, 2021.
On November 15, 2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to
the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result, the Company recognized $323,385
of other income attributable to derecognition of deferred underwriting fee allocated to offering costs and $7,134,700 was recorded to
additional paid-in capital in relation to the waiver of the deferred underwriting discount in the accompanying financial statements. As of December 31, 2022 and 2021, the deferred underwriting fee payable is $0 and $7,458,085, respectively.
Commitment Fee Shares
In connection with the Standby Equity Purchase Agreement, the Company agreed to issue Yorkville 15,000 of the Company’s ordinary shares upon consummation of the Initial Business Combination.
Service Provider Agreements
From time to time the Company has entered into and may enter into agreements with various services providers and advisors, including investment
banks, to help us identify targets, negotiate terms of potential Business Combinations, consummate a Business Combination and/or provide other services. In connection with these agreements, the Company may be required to pay such service
providers and advisors fees in connection with their services to the extent that certain conditions, including the closing of a potential Business Combination, are met. If a Business Combination does not occur, the Company would not expect to be
required to pay these contingent fees. There can be no assurance that the Company will complete a Business Combination.
During the year ended December 31, 2022, the Company entered into a contingent fee agreement with a service provider whereby the conditions for
payment were met prior to December 31, 2022. The aggregate fee was $525,000 and is included in accounts payable on the in the Company’s
balance sheets.
|
SHAREHOLDERS' DEFICIT |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
SHAREHOLDERS' DEFICIT [Abstract] | |
SHAREHOLDERS' DEFICIT |
NOTE 8. SHAREHOLDERS’
DEFICIT
Preference shares – The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of
directors. As of December 31, 2022 and 2021, there were no preference shares issued or outstanding.
Class A Ordinary Shares – The Company is authorized to issue 500,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of December 31, 2022 and 2021, there were no Class A ordinary shares issued and outstanding, excluding 21,308,813 Class A ordinary
shares subject to possible redemption.
Class B Ordinary Shares – The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one
vote for each share of Class B ordinary shares. At December 31, 2022 and 2021, there were 5,327,203 Class B ordinary shares
issued and outstanding. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813
Units. As a result, 422,797 founder shares were forfeited on April 19, 2021.
Holders of Class A ordinary shares and
holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles
of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on
by its shareholders.
The Class B ordinary shares will
automatically convert into Class A ordinary shares, which such Class A ordinary shares delivered upon conversion will not have redemption rights or be entitled to liquidating distributions if the Company does not consummate an initial Business
Combination, at the time of the initial Business Combination or earlier at the option of the holders thereof at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate,
on an as-converted basis, 20% of the sum of (i) the total number of ordinary shares issued and outstanding upon the completion of
the IPO, plus (ii) the total number of Class A ordinary shares issued, deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued by the Company in connection with or in relation to
the consummation of the initial Business Combination, excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued or to be issued to any seller in the
initial Business Combination and any Private Placement Warrants issued to the Sponsor, its affiliates or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert
into Class A ordinary shares at a rate of less than one-to-one.
|
SUBSEQUENT EVENTS |
12 Months Ended |
---|---|
Dec. 31, 2022 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS |
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements
were issued. Based upon this review, other than as described below or in these financial statements, the Company did not identify any subsequent events that would have
required adjustment or disclosure in the financial statements.
On March 6, 2023, the Company held an extraordinary general meeting of shareholders ( the “Extension Meeting”) to amend its amended and restated memorandum and articles of association to extend the date by which it has to consummate an
initial Business Combination
to June 8, 2023 (or March 8, 2024, if applicable under the Amended and Restated Articles of Association). Carbon Revolution or the Sponsor (or one or more of their Affiliates, members or third-party designees) (the “Lender”) will
deposit $160,000 into the Trust Account for each such monthly extension, for an aggregate deposit of up to $1,440,000 (if all nine
additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by the Company to the Lender.
On March 10, 2023, the Company issued an unsecured promissory note in the total principal amount of up to $1,500,000 (the “Promissory Note”) to Carbon Revolution. The Promissory Note does not bear interest and matures upon closing of the Company’s
initial business combination. In the event that the Company does not consummate a business combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. The proceeds of the Promissory
Note will be deposited in the Company’s trust account. As of March 31, 2023, there was $480,000 outstanding under the
Promissory Note which will be utilized for three monthly extensions through June 8, 2023.
In connection with that vote, the holders of 15,042,168 Class A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount of approximately $153,567,547 or $10.21 per
share. After the satisfaction of such redemptions and receipt of the initial deposit of $480,000 to the Trust Account, the
balance in the Trust Account was approximately $64,457,034.
Certain purported shareholders of the Company sent demand letters (the “Demands”) alleging deficiencies and/or omissions in the
Registration Statement on Form F-4, filed by Carbon Revolution with the SEC on February 27, 2023. The Demands seek additional disclosures to remedy these purported deficiencies. The Company believes that the allegations in the Demands
are meritless.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Basis of Presentation
The accompanying financial statements are presented in conformity with accounting
principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).
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Use of Estimates |
Use of Estimates
The preparation of the financial statements in conformity with GAAP requires the Company’s management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a
condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the future. One
of the more significant accounting estimates included in these statements are the warrant liabilities and commitment fee shares liability. Such estimates may be subject to change as more current information becomes available and accordingly
the actual results could differ significantly from those estimates.
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Cash and Cash Equivalents |
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three
months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022 and 2021.
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Marketable Securities Held in Trust Account |
Marketable Securities Held in Trust Account
At December 31, 2022 and 2021, the assets held in the Trust Account were held in
money market funds. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting
from the change in fair value of investments held in Trust Account are included in interest income in the accompanying statements of operations. The estimated fair value of investments held in Trust Account are determined using available market
information.
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Fair Value Measurements |
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or
paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the
highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
In some circumstances, the inputs used to measure fair value might be categorized
within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
The fair value of the Company’s certain assets and liabilities, which qualify as
financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses,
and due to related party are estimated to approximate the carrying values as of December 31, 2022 and 2021 due to the short maturities of such instruments.
The fair value of the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and
unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrants is
classified as level 3. The fair value of the commitment fee shares is based on a discounted cash flow model whereby the stock payment was discounted using risk free rates based on an
estimated settlement date. The fair value of the commitment fee shares liability is classified as level 3. See Note 6 for additional information on assets and liabilities measured at fair value.
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Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of
credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage. At December 31, 2022 and 2021, the Company has not experienced losses on this account and management
believes the Company is not exposed to significant risks on such account.
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Ordinary Shares Subject to Possible Redemption |
Ordinary Shares Subject to Possible Redemption
All of the 21,308,813 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares
in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of
association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption
to be classified outside of permanent equity. Therefore, all Class A ordinary shares has been classified outside of permanent equity.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid
in capital and accumulated deficit.
As of December 31, 2022 and 2021, the Class A ordinary shares reflected on the
balance sheet are reconciled in the following table:
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Net Income Per Ordinary Share |
Net Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary
shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The 12,210,780
potential ordinary shares for outstanding warrants to purchase the Company’s shares were excluded from diluted earnings per share for the year ended December 31, 2022 and for the period from January 7, 2021 (inception) through December 31, 2021
because the warrants are contingently exercisable, and the contingencies have not yet been met. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods. The table below
presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:
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Offering Costs associated with the Initial Public Offering |
Offering Costs associated with the Initial Public Offering
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff
Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are allocated to the separable
financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A ordinary shares are
charged to the shareholders’ deficit. The Company incurred offering costs amounting to $12,271,167 as a result of the IPO consisting of a $4,261,764 underwriting fee $7,458,085 of
deferred underwriting fees and $551,318 of other offering costs. The Company recorded $11,731,323 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $539,844 of offering costs in connection with the Public Warrants and Private Placement Warrants that were classified as liabilities.
On November 15, 2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to
the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result, the Company recognized $323,385
of other income attributable to the derecognition of deferred underwriting fees allocated to offering costs and $7,134,700 was recorded
to additional paid-in capital in relation to the waiver of the deferred underwriting discount in the accompanying financial statements (see Note 7).
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Warrant Liabilities and Derivative Financial Instruments |
Warrant Liabilities
The Company accounts for warrants as either equity-classified or
liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The
assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC
815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and
as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to
be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statement of operations. The initial fair
value of the Private and Public Warrants were estimated using a Monte Carlo simulation (see Note 6).
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). Derivative instruments are initially recorded at fair value on the grant date and re-valued at
each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end
of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Standby Equity Purchase Agreement Classification.
The Company accounts for its CEF as either equity-classified or liability-classified instruments based on an assessment of the agreement’s specific
terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the CEF is a freestanding financial instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the CEF
meets all of the requirements for equity classification under ASC 815, including whether the CEF is indexed to the Company’s Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of
professional judgment, is conducted at date of the agreement and as of each subsequent quarterly period end date while the CEF is outstanding. For an agreement that meets all of the criteria for equity classification, the CEF would be required to
be recorded as a component of additional paid-in capital at the time of issuance.
For an agreement that does not meet all the criteria for equity classification, the CEF would be required to be recorded at its initial fair value on
the date of issuance. The fair value of the CEF is remeasured at each balance sheet date with the change in the estimated fair value of the CEF recognized as a non-cash gain or loss on the statements of operations. The Company has analyzed the
CEF (as defined in Note 1) and determined it is considered to be a freestanding instrument and does not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. Based on the settlement terms of
the agreement, the CEF met the requirements for equity classification.
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Commitment Fee Shares Liability |
Commitment Fee Shares Liability
In connection with the Standby Equity Purchase Agreement, the Company agreed to issue Yorkville 15,000 of the
Company’s ordinary shares upon consummation of the Initial Business Combination. The Company recorded the fair value of the commitment fee shares liability on the balance sheets and the related expense on its statements of operations. The
initial fair value of the commitment fee shares liability was estimated using a discounted cash flow model (see Note 6).
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Income Taxes |
Income Taxes
The Company accounts for income taxes under FASB ASC 740, “Income Taxes” (“ASC
740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived
from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the
financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.
There were no unrecognized tax benefits as of December 31, 2022 and 2021. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to
unrecognized tax benefits as income tax expense. As of December 31, 2022 and 2021, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in
significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
There is currently no taxation imposed on income by the Government of the Cayman
Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.
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Recent Accounting Pronouncements |
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting
Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial
instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity
classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted
earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022 and should be applied on a full or modified retrospective basis, with early adoption
permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 on January 7, 2021 (Inception). The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.
Management does not believe that any recently issued, but not effective, accounting
standards, if currently adopted, would have a material effect on the Company’s financial statements.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Common Stock Subject to Possible Redemption |
As of December 31, 2022 and 2021, the Class A ordinary shares reflected on the
balance sheet are reconciled in the following table:
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Basic and Diluted Net Income Per Ordinary Share | The table below
presents a reconciliation of the numerator and denominator used to compute basic and diluted net income per share for each class of ordinary shares:
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table presents information about the Company’s assets and liabilities
that were measured at fair value on a recurring basis as of December 31, 2022 and 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
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Fair Value Measurement Inputs |
The key inputs into the Monte Carlo simulation model for the warrant liability were
as follows:
The key inputs into the present value model for the commitment fee shares liability were as follows:
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Change in Fair Value of Warrant Liabilities |
The following table sets forth a summary of the changes in the fair value of the
Level 3 warrant liability for the year ended December 31, 2022 and 2021:
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ORGANIZATION AND BUSINESS OPERATIONS, Going Concern and Liquidity (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Going Concern and Liquidity [Abstract] | ||
Cash | $ 1,032,620 | $ 1,714,922 |
Working capital (deficit) | $ (3,300,000) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cash and Cash Equivalents (Details) |
Dec. 31, 2022
USD ($)
|
---|---|
Cash and Cash Equivalents [Abstract] | |
Cash equivalents | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Offering Costs (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Nov. 15, 2022 |
Mar. 08, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Offering Costs [Abstract] | ||||
Offering costs | $ 11,551,318 | $ 12,271,167 | ||
Underwriting fees | 4,000,000 | 4,261,764 | ||
Deferred underwriting fees | 7,000,000 | 7,458,085 | ||
Other offering costs | 551,318 | 551,318 | ||
Offering costs included in Equity | 11,731,323 | |||
Offering costs allocated to issuance of warrants | $ 539,844 | |||
Other income attributable to derecognition of deferred underwriting fee allocated to offering costs | $ 323,385 | 323,385 | $ 0 | |
Decrecognition of offering costs recorded to additional paid-in capital | $ 7,134,700 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Income Taxes (Details) |
Dec. 31, 2022
USD ($)
|
---|---|
Income Taxes [Abstract] | |
Unrecognized tax benefits | $ 0 |
Accrued interest and penalties | $ 0 |
PRIVATE PLACEMENT (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 10, 2021 |
Mar. 08, 2021 |
Dec. 31, 2022 |
|
Private Placement Warrants [Abstract] | |||
Period for warrants to become exercisable | 30 days | ||
Over-Allotment Option [Member] | |||
Private Placement Warrants [Abstract] | |||
Share price (in dollars per share) | $ 10 | ||
Units issued (in shares) | 1,308,813 | ||
Private Placement Warrants [Member] | |||
Private Placement Warrants [Abstract] | |||
Period for warrants to become exercisable | 30 days | ||
Private Placement Warrants [Member] | Private Placement [Member] | |||
Private Placement Warrants [Abstract] | |||
Warrants issued (in shares) | 4,933,333 | ||
Share price (in dollars per share) | $ 1.5 | ||
Gross proceeds from issuance of warrants | $ 7,400,000 | ||
Private Placement Warrants [Member] | Over-Allotment Option [Member] | |||
Private Placement Warrants [Abstract] | |||
Units issued (in shares) | 174,509 |
RELATED PARTY TRANSACTIONS, Due From/To Related Parties (Details) - USD ($) |
Dec. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Due to Related Parties [Abstract] | ||
Due from related party, net | $ 12,526 | $ 0 |
Due to related party | 0 | 222 |
Sponsor [Member] | Tax [Member] | ||
Due to Related Parties [Abstract] | ||
Due from related party, net | 12,526 | |
Due from related party | 12,973 | |
Sponsor [Member] | Operating Expenses [Member] | ||
Due to Related Parties [Abstract] | ||
Due to related party | $ 447 | $ 222 |
RELATED PARTY TRANSACTIONS, Promissory Note (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022 |
Mar. 31, 2023 |
Mar. 10, 2023 |
Dec. 31, 2021 |
Jan. 12, 2021 |
|
Related Party Transactions [Abstract] | |||||
Receivable from Sponsor | $ 12,526 | $ 0 | |||
Sponsor [Member] | Promissory Note [Member] | |||||
Related Party Transactions [Abstract] | |||||
Maximum borrowing limit | $ 300,000 | ||||
Proceeds from sponsor | 60,094 | ||||
Receivable from Sponsor | $ 15,771 | ||||
Carbon Revolution [Member] | The Note [Member] | Subsequent Event [Member] | |||||
Related Party Transactions [Abstract] | |||||
Maximum borrowing limit | $ 1,500,000 | ||||
Amount borrowed under loan | $ 480,000 |
RELATED PARTY TRANSACTIONS, Working Capital Loans (Details) - Working Capital Loans [Member] - Sponsor or an Affiliate of the Sponsor, or Certain of the Company's Officers and Directors [Member] |
12 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
$ / shares
| |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Conversion Price, Price per Share (in dollars per share) | $ / shares | $ 1.5 |
Borrowings outstanding | $ 0 |
Maximum [Member] | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Loans that can be converted into Warrants at lenders' discretion | $ 1,500,000 |
RELATED PARTY TRANSACTIONS, Administrative Service Fee (Details) - Sponsor [Member] - Administrative Support Agreement [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Related Party Transactions [Abstract] | ||
Related party transaction | $ 10,000 | |
Related party expense | $ 120,000 | $ 100,000 |
FAIR VALUE MEASUREMENTS, Inputs for Warrant Liability (Details) |
Dec. 31, 2022
USD ($)
$ / shares
|
Dec. 31, 2021
$ / shares
|
---|---|---|
Fair Value Measurements [Abstract] | ||
Expected term | 5 years | |
Expected Dividend Rate [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | $ | 0 | |
Warrants [Member] | ||
Fair Value Measurements [Abstract] | ||
Expected term | 5 years 2 months 4 days | 6 years 5 months 23 days |
Warrants [Member] | Expected Volatility [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.093 | 0.124 |
Warrants [Member] | Risk-free Interest Rate [Member] | ||
Fair Value Measurements [Abstract] | ||
Measurement input | 0.0475 | 0.014 |
Warrants [Member] | Fair Value of the Ordinary Share Price [Member] | ||
Fair Value Measurements [Abstract] | ||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10.09 | $ 9.69 |
FAIR VALUE MEASUREMENTS, Inputs for Commitment Fee Shares Liability (Details) |
Dec. 31, 2022
USD ($)
$ / shares
|
Nov. 28, 2022
$ / shares
|
Dec. 31, 2021
USD ($)
|
---|---|---|---|
Fair Value Measurements [Abstract] | |||
Commitment fee shares liability | $ | $ 147,469 | $ 0 | |
Commitment Fee Shares Liability [Member] | |||
Fair Value Measurements [Abstract] | |||
Expected term | 2 months 12 days | 4 months 28 days | |
Commitment Fee Shares Liability [Member] | Risk-free Interest Rate [Member] | |||
Fair Value Measurements [Abstract] | |||
Measurement input | 0.0434 | 0.0461 | |
Commitment Fee Shares Liability [Member] | Fair Value of the Ordinary Share Price [Member] | |||
Fair Value Measurements [Abstract] | |||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 10.09 | $ 10.015 |
COMMITMENTS AND CONTINGENCIES, Registration and Shareholders Rights (Details) |
12 Months Ended |
---|---|
Dec. 31, 2022
Demand
| |
Registration and Shareholders Rights [Abstract] | |
Period for warrants to become exercisable | 30 days |
Maximum [Member] | |
Registration and Shareholders Rights [Abstract] | |
Number of demands eligible security holder can make | 3 |
Period for warrants to become exercisable | 12 months |
COMMITMENTS AND CONTINGENCIES, Service Provider Agreements (Details) |
Dec. 31, 2022
USD ($)
|
---|---|
Service Provider Agreements [Abstract] | |
Contingent fee payable | $ 525,000 |
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