UNITED STATES
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FORM
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ZALATORIS ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2023
TABLE OF CONTENTS
Page | |||
PART I. FINANCIAL INFORMATION | |||
Item 1. | Financial Statements | 1 | |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 | |
Item 3. | Quantitative and Qualitative Disclosures Regarding Market Risk | 18 | |
Item 4. | Controls and Procedures | 19 | |
PART II. OTHER INFORMATION | |||
Item 1. | Legal Proceedings | 20 | |
Item 1A. | Risk Factors | 20 | |
Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 20 | |
Item 3. | Defaults Upon Senior Securities | 20 | |
Item 4. | Mine Safety Disclosures | 20 | |
Item 5. | Other Information | 20 | |
Item 6. | Exhibits | 21 | |
Signatures | 22 |
i
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Zalatoris Acquisition Corp.
Condensed Balance Sheets
September 30, | December 31, | |||||||
2023 | 2022 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Prepaid expenses | ||||||||
Total Current Assets | ||||||||
Cash and marketable securities held in Trust Account | ||||||||
Total Assets | $ | $ | ||||||
LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIENCY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | $ | ||||||
Accrued expenses | ||||||||
Income tax payable | ||||||||
Franchise tax payable | ||||||||
Excise tax payable | ||||||||
Due to related party | ||||||||
Total Current Liabilities | ||||||||
Deferred underwriters’ discount | ||||||||
Total Liabilities | ||||||||
Commitments and Contingencies (Note 5) | ||||||||
Class A common stock, $ | ||||||||
Stockholders’ Deficiency: | ||||||||
Preferred stock, $ | ||||||||
Class A common stock, $ | ||||||||
Class B common stock, $ | ||||||||
Additional paid-in capital | ||||||||
Accumulated deficit | ( | ) | ( | ) | ||||
Total Stockholders’ Deficiency | ( | ) | ( | ) | ||||
Total Liabilities, Redeemable Common Stock and Stockholders’ Deficiency | $ | $ |
The accompanying notes are an integral part of these financial statements.
1
Zalatoris Acquisition Corp.
Condensed Statements of Operations
(unaudited)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Operating Expenses: | ||||||||||||||||
Formation and operating costs | $ | $ | $ | $ | ||||||||||||
Professional fees | ||||||||||||||||
Franchise tax expense | ||||||||||||||||
Total Operating Expenses | ||||||||||||||||
Loss From Operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other Income: | ||||||||||||||||
Interest income | ||||||||||||||||
Total Other Income | ||||||||||||||||
Income (loss) before provision for income taxes | ( | ) | ||||||||||||||
Income tax (provision) benefit | ( | ) | ( | ) | ||||||||||||
Net Income (Loss) | $ | $ | $ | $ | ( | ) | ||||||||||
$ | $ | $ | $ | ( | ) | |||||||||||
$ | $ | $ | $ | ( | ) |
The accompanying notes are an integral part of these unaudited interim financial statements.
2
Zalatoris Acquisition Corp.
Condensed Statements of Changes in Stockholders’ Deficiency
(unaudited)
For the Nine Months Ended September 30, 2023 | ||||||||||||||||||||
Additional | Total | |||||||||||||||||||
Class B Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||
Balance - January 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Accretion of common stock subject to possible redemption | - | ( | ) | ( | ) | |||||||||||||||
Net income | - | |||||||||||||||||||
Balance - March 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Contribution of capital from sponsor | - | |||||||||||||||||||
Accretion of common stock subject to possible redemption | - | ( | ) | ( | ) | ( | ) | |||||||||||||
Excise tax liability arising from redemption of Class A shares | - | ( | ) | ( | ) | |||||||||||||||
Net income | - | |||||||||||||||||||
Balance - June 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Accretion of common stock subject to possible redemption | - | ( | ) | ( | ) | |||||||||||||||
Excise tax liability arising from redemption of Class A shares | - | ( | ) | ( | ) | |||||||||||||||
Net income | - | |||||||||||||||||||
Balance - September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
For the Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Additional | Total | |||||||||||||||||||
Class B Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
Shares | Amount | Capital | Deficit | Deficiency | ||||||||||||||||
Balance - January 1, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Remeasurement of Class A common stock to redemption value | - | ( | ) | ( | ) | |||||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Balance - March 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Net loss | - | ( | ) | ( | ) | |||||||||||||||
Balance - June 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Accretion of Class A common stock subject to possible redemption | - | - | - | ( | ) | ( | ) | |||||||||||||
Net loss | - | |||||||||||||||||||
Balance - September 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) |
The accompanying notes are an integral part of these unaudited interim financial statements.
3
Zalatoris Acquisition Corp.
Condensed Statements of Cash Flows
(unaudited)
For the Nine Months Ended | ||||||||
September 30, | ||||||||
2023 | 2022 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income (loss) | $ | $ | ( | ) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Interest earned on cash held in Trust Account | ( | ) | ( | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | ( | ) | ||||||
Deferred tax asset | ( | ) | ||||||
Accounts payable | ( | ) | ||||||
Accrued expenses | ||||||||
Income tax payable | ||||||||
Franchise taxes payable | ( | ) | ||||||
Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash withdrawn from Trust Account for redemptions | ||||||||
Proceeds from Trust Account for franchise tax reimbursement | ||||||||
Proceeds from Trust Account for income tax reimbursement | ||||||||
Investment of cash in Trust Account for extension payments | ( | ) | ||||||
Net Cash Provided By Investing Activities | ||||||||
Cash Flows from Financing Activities: | ||||||||
Contribution of capital from sponsor | ||||||||
Payment of redemptions | ( | ) | ||||||
Proceeds from working capital loan from sponsor | ||||||||
Proceeds from related party | ||||||||
Payment of offering costs | ( | ) | ||||||
Payments to related party | ( | ) | ||||||
Proceeds from Trust Account for franchise tax reimbursement | ||||||||
Net Cash Used In Financing Activities | ( | ) | ( | ) | ||||
Net Decrease in Cash and Cash Equivalents | ( | ) | ( | ) | ||||
Cash and Cash Equivalents - Beginning of the Period | ||||||||
Cash and Cash Equivalents - End of the Period | $ | $ | ||||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Non-cash investing and financing activities: | ||||||||
Excise tax liability arising from redemption of Class A shares | $ | $ | ||||||
Remeasurement of Class A common stock to redemption value | $ | $ | ||||||
Accretion of Class A common stock subject to possible redemption | $ | $ |
The accompanying notes are an integral part of these unaudited interim financial statements.
4
ZALATORIS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization, Plan of Business Operations, Going Concern and Management’s Plans, Risks and Uncertainties and Basis of Presentation
Organization and Plan of Business Operations
Zalatoris Acquisition Corp. (f/k/a Trajectory Alpha Acquisition Corp.) (the “Company”) is a blank check company incorporated in the State of Delaware on February 1, 2021. The Company was formed for the purpose of effecting a merger, consolidation, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities (the “Business Combination”). 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.
All activity for the period from February 1, 2021 (inception) through September 30, 2023 relates to the Company’s formation, the IPO (as defined below) and, since the closing of the IPO, 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.
The Company’s sponsor is J. Streicher Holdings, LLC, a Delaware limited liability company (the “Sponsor”). See below for details of the change in sponsor on June 2, 2023.
On December 14, 2021, the Company completed the initial
public offering (the “IPO”) of
Simultaneously with the consummation
of the IPO and the full exercise of the over-allotment option by the underwriter, the Company consummated the private placement of
Change in Sponsor
On June 2, 2023, the Company entered into a Purchase and
Contribution Agreement (the “Purchase Agreement”) with the Sponsor and the Former Sponsor, pursuant to which the Sponsor contributed
$
In connection with the Purchase Agreement, effective June 2, 2023, Peter Bordes, Paul Sethi, Jonathan Bond, Ninan Chacko, and Elisabeth H. DeMarse tendered their resignations as directors of the Company, and Peter Bordes and Michael E.S. Frankel resigned as officers of the Company. Effective June 2, 2023, Jonathan Bond, Ninan Chacko, and Elisabeth H. DeMarse also resigned as directors of the audit committee, compensation committee, and nominating and corporate governance committee of the Company.
5
On June 2, 2023, in connection with the Purchase Agreement, Pantelis Dimitriou, Niall Ennis, Paul Davis, Adeel Rouf, and Sarah Watson were appointed as members of the board of directors of the Company. Paul Davis was appointed as Chief Executive Officer of the Company, and Pantelis Dimitriou was appointed as the Company’s Chief Financial Officer.
In addition, on June 2, 2023, the Company entered into a Purchase
Agreement (the “Metric Assignment”) with the Sponsor, the Former Sponsor, and Metric Finance Holdings II, LLC (“Metric”),
pursuant to which the Sponsor acquired
Accordingly, the Sponsor now holds
Change of Board Member
As of July 26, 2023, Sarah Watson, who was appointed to the Company’s board of directors June 2, 2023, stepped down from her position as a director of the Company. Ms. Watson’s resignation was not the result of any disagreement with management or the Company on any matter relating to the Company’s operations, policies or practices. On September 7, 2023, Ms. Watson’s vacant seat on the Board was filled by Mr. Stephanos Papadopoulos.
Extension Amendment to Amended and Restated Certificate of Incorporation
On June 12, 2023, at a special meeting of the Company’s
stockholders (the “Special Meeting”), the stockholders of the Company approved an amendment (the “Charter Amendment”)
to the Company’s amended and restated certificate of incorporation, which amended the structure and cost of the Company’s
right to extend the date (the “Termination Date”) by which the Company must (i) consummate a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses, (ii)
cease its operations if it fails to complete such Business Combination, and (iii) redeem or repurchase
The Charter Amendment allows the Company to extend the Termination Date
by up to nine one-month extensions to March 14, 2024 (each one-month extension period, an “Extended Period”) provided that
if any Extended Period ends on a day that is not a business day, such Extended Period will be automatically extended to the next succeeding
business day. To obtain each one-month extension, the Company, the Sponsor, or any of their affiliates or designees must deposit into
the Company’s trust account by the deadline applicable prior to the extension the lesser of (i) $
On June 26, 2023, the board of directors of the Company filed a certificate of amendment to the amended and restated certificate of incorporation with the Secretary of State of Delaware, pursuant to which the Company’s name was changed from “Trajectory Alpha Acquisition Corp.” to “Zalatoris Acquisition Corp.” (the “Name Change”). This Name Change became effective as of the filing date. Trading under the new name began on June 27, 2023.
The Trust Account
The funds in the trust account will be invested only in U.S.
government treasury bills with a maturity of
During the three and nine months ended September 30, 2023,
the Sponsor deposited $
6
Redemption of Public Shares
On June 12, 2023, the Company held a Special Meeting
where the Company’s public stockholders voted and approved a proposal to amend the Company’s Amended and Restated
Certificate of Incorporation, which triggered a right of the Company’s public stockholders to demand the redemption of their
public shares out of funds held in the Company’s trust account. Prior to redemptions, the Company had
The funds held in the Company’s trust account, including any interest thereon, will not be used to pay for any excise tax liabilities with respect to any of the redemptions or future redemptions prior to or in connection with an initial business combination or the liquidation of the Company. The excise tax, when or if it becomes due, will be paid by the Company.
Business Combination
Following the closing of the IPO and full exercise of the
over-allotment option by the underwriter on December 14, 2021, approximately $
The Company’s management has broad discretion with
respect to the specific application of the remaining net proceeds of the IPO, although substantially all of the net proceeds of the IPO
are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein,
“target business” must be with one or more target businesses that together have a fair market value equal to at least
The Company’s amended and restated certificate of
incorporation allows the Company to extend the Termination Date by up to nine (
On July 13, 2023, we entered into a Non-Binding Letter of Intent (“LOI”) with Anteco Systems, S.L., a private limited company incorporated under the laws of Spain (“AnyTech” and “Target”), pursuant to which we propose to acquire all the issued and outstanding share capital of AnyTech, based on certain material financial and business terms and conditions being met. On September 8, 2023, we entered into a definitive Business Combination Agreement and Plan of Merger (the “Business Combination Agreement”) with Millymont Limited, a private limited company incorporated in Ireland (“Holdco”), AnyTech365 Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Holdco (“Merger Sub”), J. Streicher Technical Services, LLC, a Delaware limited liability company (“J. Streicher”), AnyTech, Miguel Ángel Casales Ruiz and Thomas Marco Balsloev, as the Target’s representatives (the “Target’s Representatives”), and Jaleel Lewis, as the Company’s representative (the “Company Representative”), pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Holdco, and the Target will merge with and into Holdco, with Holdco continuing as the surviving entity, resulting in Holdco becoming the successor registrant to the Company (the “Transaction”). As of the date of filing of this Quarterly Report, the Business Combination Agreement had not closed.
Going Concern and Management’s Plans
As of September 30, 2023, the Company had $
In addition, in order to finance transaction costs in connection
with a Business Combination, the Sponsor, initial stockholders, officers, directors or their affiliates may, but are not obligated to,
provide the Company with Working Capital Loans (as defined below) (see Note 3). As of September 30, 2023, there was an aggregate of $
7
Management has determined that the possibility that the Company may be unsuccessful in consummating an initial Business Combination by March 14, 2024 (subject to paying for four additional one-month extensions as provided above) and thereby be required to cease all operations, redeem the public shares and thereafter liquidate and dissolve, raises substantial doubt about the ability to continue as a going concern for at least one year from the date the financial statements included in this Quarterly Report on Form 10-Q were issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company decides to extend the business combination period by up to six months, then the Company will need to raise additional capital in order to fund the working capital needs of the Company. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of September 30, 2023 and for the three and nine months ended September 30, 2023. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the operating results for the full year ending December 31, 2023 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures for the year ended December 31, 2022 which are included in the Annual Report filed on Form 10-K on March 10, 2023.
Note 2 — Significant Accounting Policies
There have been no material changes to the significant accounting policies included in the audited financial statements as of December 31, 2022 and for the year then ended, which were included the Annual Report filed on Form 10-K on March 10, 2023, except as disclosed in this note.
Reclassifications
Certain prior period income statement amounts have been reclassified to conform to the Company’s fiscal 2023 presentation. These reclassifications have no impact on the Company’s previously reported net loss.
Class A Common Stock Subject to Possible Redemption
The Company accounts for Class A Common Stock subject to possible
redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities
from Equity.” Class A Common Stock subject to mandatory redemption is classified as a liability instrument and is measured at fair
value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control
of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified
in temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A Common
Stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of
uncertain future events. Accordingly, as of September 30, 2023, the
Convertible Instruments
The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with Topic 815 “Derivatives and Hedging” (“ASC 815”) of the FASB ASC. The accounting treatment of derivative financial instruments requires that the Company record any bifurcated embedded features at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded in earnings each period as non-operating, non-cash income or expense. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded features are recorded at their initial fair values which create additional debt discount to the host instrument.
Net Income (Loss) Per Common Share
Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares for the period, excluding shares subject to forfeiture. The Company has two classes of stock, which are referred to as Class A Common Stock and Class B Common Stock. Earnings and losses are shared pro rata between the two classes of stock. The Company applies the two-class method in calculating earnings (loss) per share. Remeasurement adjustments associated with the redeemable Class A Common Stock are excluded from earnings (loss) per share as the redemption value approximates fair value.
8
The calculation of diluted net income (loss) per share does
not consider the effect of the warrants issued in connection with the (i) IPO, and (ii) the private placement because the warrants are
contingently exercisable, and the contingencies have not yet been met. The warrants are exercisable to purchase
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2023 | September 30, 2023 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net income per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net income | $ | $ | $ | $ | ||||||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding including common stock subject to redemption | ||||||||||||||||
$ | $ | $ | $ |
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, 2022 | September 30, 2022 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
Denominator: | ||||||||||||||||
Weighted-average shares outstanding including common stock subject to redemption | ||||||||||||||||
$ | $ | $ | ( | ) | $ | ( | ) |
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute
for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes
accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2023, the Company accrued
$
9
At the end of each interim reporting period, the Company determines the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter.
The Company’s effective tax rate for the nine months
ended September 30, 2023 was
Judgment is required in determining whether deferred tax assets
will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate
if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized,
and a valuation allowance must be established. As of September 30, 2023, the Company’s deferred tax asset had a full valuation allowance
of $
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Related Party Transactions
Working Capital Loans
In order to finance transaction costs in connection with an
intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors
may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). The Sponsor entered
into a working capital promissory note (“Promissory Note”) with the Company, pursuant to which the Sponsor will make certain
non- interest bearing loans and advances to the Company up to $
During the three and nine months ended September 30, 2023, the Sponsor
deposited $
10
Administrative Services Agreement
We entered into an agreement, commencing on
the effective date of the IPO, to pay the Sponsor $
Note 4 — Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
As of September 30, 2023, the investments
in the Company’s trust account consisted of $
September 30, 2023 | Amortized Cost and Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of September 30, 2023 | ||||||||||||
Cash held in trust | $ | $ | $ | $ | ||||||||||||
U.S. Treasury Securities | ||||||||||||||||
$ | $ | $ | $ |
December 31, 2022 | Amortized Cost and Carrying Value | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value as of December 31, 2022 | ||||||||||||
Cash held in trust | $ | $ | $ | $ | ||||||||||||
U.S. Treasury Securities | ||||||||||||||||
$ | $ | $ | $ |
11
Note 5 — Commitments and Contingencies
Inflation Reduction Act of 2022 (the “IR Act”)
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new
U.S. federal
Any redemption or other repurchase in connection with a business combination, extension vote or otherwise, may be subject to the excise tax. Whether and to what extent the Company would be subject to the excise tax in connection with a business combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the business combination, extension or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a business combination and in the Company’s ability to complete a business combination. Finally, based on recently issued interim guidance from the Internal Revenue Service and Treasury, subject to certain exceptions, the excise tax should not apply in the event of our liquidation.
In connection with the Company’s Special Meeting on June 12, 2023,
the Company’s stockholders redeemed
Note 6 — Subsequent Events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements other than noted below.
Working Capital Loans
On October 16, 2023, $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “Zalatoris Acquisition Corp.,” “our,” “us” or “we” refer to Zalatoris Acquisition Corp., references to “management” or “management team” refer to our officers and directors, and references to the “Sponsor” refer to J. Streicher Holdings, LLC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report includes, and oral statements made from time to time by our representatives may include, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor created thereby. The Company has based these forward-looking statements on management’s current expectations, projections and forecasts about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual business, financial condition, results of operations, performance and/or achievements to be materially different from any future business, financial condition, results of operations, performance and/or achievements expressed or implied by these forward-looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other filings with the SEC. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “target,” “goal,” “shall,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. In addition, any statements that refer to expectations, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.
Overview
We are a blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, consolidation, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering (the “IPO”) and the sale of the Private Placement Warrants (as defined below), our capital stock, debt or a combination of cash, stock and debt.
On December 14, 2021, we consummated the IPO of 17,250,000 units (the “Units”), including the issuance of 2,250,000 Units as a result of the underwriters’ exercise of their over-allotment option in full. Each Unit consists of one share of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), and one-half of one of our redeemable public warrants (each whole warrant, a “Public Warrant”), with each whole Public Warrant entitling the holder thereof to purchase one share of Class A Common Stock for $11.50 per share, subject to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $172,500,000.
On December 14, 2021, simultaneously with the consummation of the IPO, we completed the private sale (the “Private Placement”) of an aggregate of 5,725,000 warrants (the “Private Placement Warrants”) to Trajectory Alpha Sponsor LLC, our former sponsor (the “Former Sponsor”), at a purchase price of $1.00 per Private Placement Warrant, generating gross proceeds of $5,725,000.
The net proceeds from the IPO, together with certain of the proceeds from the Private Placement, $174,225,000 in the aggregate (the “Offering Proceeds”), were placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee.
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Transaction costs amounted to $22,323,737, consisting of $1,500,000 of cash underwriting commissions, $5,366,378 of fair value shares of Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), issued to the underwriter, $6,262,500 of deferred underwriting commissions, $8,658,646 of the excess of fair value of the shares of Class B Common Stock acquired by Anchor Investors, and $536,213 of other offering costs.
As of September 30, 2023, the Company had $7,375 in its operating bank account and adjusted working capital deficit of $2,264,969 (which includes a pending reimbursement from the trust account for the Company’s franchise taxes and income taxes in the aggregate amount of $1,254,637). Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities and those necessary to prepare for the IPO. Following the IPO, we have not generated any operating revenues and will not generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our financial statements. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates.
For the three months ended September 30, 2023, we had net income of $620,665 which consisted of $1,586,599 of interest income, partially offset by formation and operating costs of $104,260, professional fees of $447,241, franchise tax expense of $50,000 and income tax expense of $364,433. For the nine months ended September 30, 2023, we had net income of $2,449,198 which consisted of $5,109,166 of interest income, partially offset by formation and operating costs of $592,601, professional fees of $861,229, franchise tax expense of $150,000 and income tax expense of $1,056,138.
For the three months ended September 30, 2022, we had net income of $319,305, which consisted of $685,599 of interest income and an income tax benefit of $41,929, all partially offset by formation and operating costs of $358,223 and franchise tax expense of $50,000. For the nine months ended September 30, 2022, we had net loss of $221,912, which consisted of formation and operating costs of $901,080 and franchise tax expense of $150,000, partially offset by $787,239 of interest income and an income tax benefit of $41,929.
Change in Sponsor
On June 2, 2023, we entered into a Purchase and Contribution Agreement (the “Purchase Agreement”) with J. Streicher Holdings, LLC (the “Sponsor”) and Trajectory Alpha Sponsor LLC (“Former Sponsor”), pursuant to which the Sponsor purchased 2,170,464 shares of Class B Common Stock and 4,525,000 Private Placement Warrants from the Former Sponsor.
In addition, on June 2, 2023, we entered into a Purchase Agreement (the “Metric Assignment”) with J. Streicher Holdings, LLC (the “Sponsor”), the Trajectory Alpha Sponsor LLC (the “Former Sponsor”), and Metric Finance Holdings II, LLC (“Metric”), pursuant to which the Sponsor acquired 422,434 shares of Class B Common Stock from Metric.
Accordingly, the Sponsor now holds 2,592,898 shares out of the 4,312,500 issued and outstanding shares of Class B Common Stock and 4,525,000 Private Placement Warrants out of the 5,725,000 issued and outstanding Private Placement Warrants.
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Proposed Business Combination
On July 13, 2023, we entered into a Non-Binding Letter of Intent (“LOI”) with Anteco Systems, S.L., a private limited company incorporated under the laws of Spain (“AnyTech” and “Target”), pursuant to which we propose to acquire all the issued and outstanding share capital of AnyTech, based on certain material financial and business terms and conditions being met. On September 8, 2023, we entered into a definitive Business Combination Agreement and Plan of Merger (the “Business Combination Agreement”) with Millymont Limited, a private limited company incorporated in Ireland (“Holdco”), AnyTech365 Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Holdco (“Merger Sub”), J. Streicher Technical Services, LLC, a Delaware limited liability company (“J. Streicher”), AnyTech, Miguel Ángel Casales Ruiz and Thomas Marco Balsloev, as the Target’s representatives (the “Target’s Representatives”), and Jaleel Lewis, as the Company’s representative (the “Company Representative”), pursuant to which, among other things, Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Holdco, and the Target will merge with and into Holdco, with Holdco continuing as the surviving entity, resulting in Holdco becoming the successor registrant to the Company (the “Transaction”). As of the date of filing of this Quarterly Report, the Business Combination Agreement had not closed.
Change of Name
On June 26, 2023, our board of directors filed a certificate of amendment to the amended and restated certificate of incorporation with the Secretary of State of Delaware, pursuant to which our name was changed from “Trajectory Alpha Acquisition Corp.” to “Zalatoris Acquisition Corp.” (the “Name Change”). This Name Change became effective as of the filing date. Trading under the new name began on June 27, 2023.
Extension Amendment to Amended and Restated Certificate of Incorporation
On June 12, 2023, at a special meeting of our stockholders (the “Special Meeting”), our stockholders approved an amendment (the “Charter Amendment”) to our amended and restated certificate of incorporation, which amended the structure and cost of our right to extend the date (the “Termination Date”) by which we must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving our business and one or more businesses, (ii) cease our operations if we fail to complete such Business Combination, and (iii) redeem or repurchase 100% of our Class A Common Stock included as part of the units sold in our initial public offering.
The Charter Amendment allows us to extend the Termination Date by up to nine one-month extensions to March 14, 2024 (each one-month extension period, an “Extended Period”) provided that if any Extended Period ends on a day that is not a business day, such Extended Period will be automatically extended to the next succeeding business day. To obtain each one-month extension, the Company, the Sponsor, or any of our affiliates or designees must deposit into our trust account by the deadline applicable prior to the extension the lesser of (i) $150,000 and (ii) an aggregate amount equal to $0.04 multiplied by the number of our public shares that were not redeemed in connection with the stockholder vote at the Special Meeting (the “Extension Fee”). To date, we have caused an aggregate of $750,000 to be deposited into the trust account for the five of the nine monthly extensions such that the current termination date of the Company is November 14, 2023.
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Liquidity and Capital Resources
As of September 30, 2023, the Company had $7,375 in its operating bank account and adjusted working capital deficit of $2,264,969 (which includes a pending reimbursement from the trust account for the Company’s franchise taxes and income taxes in the aggregate amount of $1,254,637).
Management has determined that the possibility that we may be unsuccessful in consummating an initial Business Combination by March 14, 2024 (subject to paying for four additional one-month extensions as provided above) and thereby be required to cease all operations, redeem the public shares and thereafter liquidate and dissolve, raises substantial doubt about the ability to continue as a going concern for at least one year from the date the financial statements included in this Quarterly Report on Form 10-Q were issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If we decide to extend the business combination period by up to six months, then we will need to raise additional capital in order to fund our working capital needs. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Off-Balance Sheet Financing Arrangements
As of September 30, 2023 and December 31, 2022, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Commitments and Contractual Obligations
Other than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long- term liabilities.
Administrative Services Agreement
We entered into an agreement, commencing on the effective date of the IPO, to pay the Sponsor $10,000 per month for office space and secretarial and administrative services provided to members of our management team. Upon completion of the initial Business Combination or our liquidation, we will cease paying these monthly fees. During the three and nine months ended September 30, 2023, we recognized $30,000 and $90,000, respectively, of such administrative support services expense. During the three and nine months ended September 30, 2022, we recognized $30,000 and $90,000, respectively, of such administrative support services expense. As of September 30, 2023, we had accrued $40,000 of administrative support services expense related to the agreement.
Registration and Stockholder Rights
The holders of the Class B Common Stock, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Class B Common Stock) are entitled to registration rights pursuant to a registration rights agreement entered into on the effective date of the IPO requiring us to register such securities for resale (in the case of the Class B Common Stock, only after conversion to shares of Class A Common Stock). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that no sales of these securities will be effected until after the expiration of the applicable lock-up period, as described herein. We will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The underwriter had a 45-day option from the date of the IPO to purchase up to an additional 2,250,000 Units to cover over-allotments. On December 14, 2021, the underwriter fully exercised its over-allotment option.
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The underwriter was paid an underwriting commission of $0.10 per unit, or $1,500,000 in the aggregate, upon the closing of the IPO. The underwriter was also issued 662,434 shares of Class B Common Stock (as defined below) with a fair value of $5,366,378, or $8.10 per share. We valued those shares using a Black-Scholes Model. In addition, $6,262,500 is payable to the underwriter for deferred underwriting commissions. The deferred underwriting commission will become payable to the underwriter from the amounts held in the trust account solely in the event that we complete the Business Combination, subject to the terms of the underwriting agreement.
The underwriters have agreed (i) to waive their conversion rights (or right to participate in any tender offer) with respect to such shares in connection with the initial business combination and (ii) to waive their rights to liquidating distributions from the trust account with respect to such shares if we fail to complete the initial business combination within the completion window.
The Class B Common Stock received by the underwriter has been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to FINRA Rule 5110(e)(1). Additionally, these Class B Common Stock may not be sold, transferred, assigned, pledged or hypothecated or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a 180-day period following the effective date of this prospectus except to any selected dealer participating in the offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. The underwriter has agreed that the Class B Common Stock they receive will not be sold or transferred by them (except to certain permitted transferees) until after we completed an initial Business Combination. We granted the holders of Class B Common Stock the registration rights. In compliance with FINRA Rule 5110, the underwriter’s registration rights are limited to demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of this prospectus with respect to the registration under the Securities Act of the Class B Common Stock.
Critical Accounting Policies and Estimates
The preparation of the financial statement in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement.
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 near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. We have identified the following as our critical accounting policies:
Class A Common Stock Subject to Possible Redemption
We account for our Class A Common Stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A Common Stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified in temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A Common Stock feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, as of September 30, 2023, the 6,358,118 shares of Class A Common Stock are presented at redemption value of $67,090,078 or $10.55 per share, as temporary equity, outside of the stockholders’ deficit section of the balance sheet.
Working Capital Loans
In order to finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the our officers and directors may, but are not obligated to, loan the us funds as may be required (the “Working Capital Loans”). The Sponsor entered into a working capital promissory note (“Promissory Note”) with us, pursuant to which the Sponsor will make certain non- interest bearing loans and advances to us up to $2,000,000. The principal balance of the Promissory Note will be due and payable by us upon the earlier of: (i) the closing of the initial Business Combination, and (ii) the liquidation of the Company. If we complete an initial Business Combination, we will be obligated to repay such loaned amounts out of the proceeds of the trust account released to us. In the event that the initial Business Combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account can be used to repay such loaned amounts. We may elect to convert up to $2,000,000 of unpaid principal under the Promissory Note into that number of warrants, equal to: (i) the portion of the unpaid principal begin converted, divided by (y) the conversion price of One Dollar ($1.00) per warrant, rounded up to the nearest whole number of warrants. The warrants are identical to the Private Placement Warrants, including as to exercise price, exercisability, and exercise period.
During the three and nine months ended September 30, 2023, the Sponsor deposited $450,000 and $600,000, respectively, related to Extension Fees into the trust account on behalf of the Company in the form of Working Capital Loans. Further, during the three and nine months ended September 30, 2023, the Sponsor made payments to vendors on behalf of the Company in the amount of $216,400 in the form of Working Capital Loans. As of September 30, 2023, the Company had aggregate Working Capital Loans outstanding to the Sponsor in the amount of $816,400, which were included in “Due to related party” on the condensed balance sheet as of such date.
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Income Taxes
We follow the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
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. As of September 30, 2023, we accrued $18,047 related to estimated tax penalties, of which, $(7,248) and $18,047, was included within formation and operating costs on the statement of operations for the three and nine months ended September 30, 2023, respectively. We are currently not aware of any issues under review that could result in significant payments, accruals or material deviation from our position. We are subject to income tax examinations by major taxing authorities since inception. related to estimated tax penalties, which was included within formation and operating costs on the statement of operations for the nine months ended September 30, 2023. We are currently not aware of any issues under review that could result in significant payments, accruals or material deviation from our position. We are subject to income tax examinations by major taxing authorities since inception.
At the end of each interim reporting period, we determine the income tax provision by using an estimate of the annual effective tax rate, adjusted for discrete items occurring in the quarter.
Our effective tax rate for the nine months ended September 30, 2023 was 30%, which differed from the federal statutory tax rate of 21% primarily due to the change in valuation allowance recognized against deferred tax assets in the U.S.
Judgment is required in determining whether deferred tax assets will be realized in full or in part. Management assesses the available positive and negative evidence on a jurisdictional basis to estimate if deferred tax assets will be recognized and when it is more likely than not that all or some deferred tax assets will not be realized, and a valuation allowance must be established. As of September 30, 2023, our deferred tax asset had a full valuation allowance of $569,117.
Net Loss per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”. Net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock for the period. We have two classes of stock, which are referred to as Class A Common Stock and Class B Common Stock. Earnings and losses are shared pro rata between the two classes of stock. We apply the two-class method in calculating earnings per share. Remeasurement adjustments associated with the redeemable Class A Common Stock are excluded from earnings per share as the redemption value approximates fair value.
The calculation of diluted loss per share does not consider the effect of the warrants issued in connection with the (i) IPO, and (ii) the private placement because the warrants are contingently exercisable, and the contingencies have not yet been met. The warrants are exercisable to purchase 14,350,000 Class A Common Stock in the aggregate. As of September 30, 2023 and December 31, 2022, we did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in our earnings. As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Not applicable to smaller reporting companies.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (who serves as our Principal Executive Officer) and Chief Financial Officer (who serves as our Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of September 30, 2023.
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes in our internal control over financial reporting during the quarter ending September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Factors that could cause our actual business, financial condition and/or results of operations to differ materially from those in this Quarterly Report are any of the risks factors described in our final prospectus dated December 9, 2021 filed with the SEC on December 13, 2021 (the “IPO Prospectus”) and our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 10, 2023 (the “Form 10-K”). Any of these risk factors could result in a significant or material adverse effect on our business, financial condition and/or results of operations. Additional risk factors not presently known to us or that we currently deem to be immaterial may also impair our business, financial condition, and/or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the IPO Prospectus or the Form 10-K.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
There were no unregistered sales of equity securities during the nine months ended September 30, 2023.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
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Item 6. Exhibits
* | Filed herewith. |
** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended, and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ZALATORIS ACQUISITION CORP. | ||
Date: November 13, 2023 | By: | /s/ Paul Davis |
Name: | Paul Davis | |
Title: | Chief Executive Officer (Principal Executive Officer) | |
Date: November 13, 2023 | By: | /s/ Pantelis Dimitriou |
Name: | Pantelis Dimitriou | |
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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