UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from _______to_______
Commission
File Number:
| (Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| (Address of principal executive offices) | (Zip Code) |
| Registrant’s
telephone number, including area code: ( |
| Not applicable |
| (Former name or former address, if changed since last report) |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically, if any, every Interactive Date File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The Stock Market LLC | ||||
| The Stock Market LLC | ||||
| The Stock Market LLC |
As of May 15, 2023, there were shares of the Company’s Class A Common Stock, $0.0001 par value per share (the “Class A Shares”) which number includes 490,607 shares in unseparated units, and of the Company’s Class B Common Stock, $0.0001 par value per share issued and outstanding (the “Class B Shares”).
VISION SENSING ACQUISITION CORP.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VISION SENSING ACQUISITION CORP.
BALANCE SHEET
March 31, 2023 (Unaudited) | December 31, 2022 (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Other receivable | ||||||||
| Prepaid expense | ||||||||
| Cash and Marketable Securities held in trust account | ||||||||
| Total Current Assets | ||||||||
| Cash and Marketable Securities held in trust account | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accrued expenses | $ | $ | ||||||
| Account payables | ||||||||
| Working capital loan | ||||||||
| Extension loan | ||||||||
| Income tax payable | ||||||||
| Franchise tax payable | ||||||||
| Deferred underwriter commission | ||||||||
| Total Current Liabilities | ||||||||
| Deferred underwriter commission | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Class A common stock subject to possible redemption; shares (at $ per share at March 31, 2022 and $ per share at December 31, 2022) | ||||||||
| Shareholders’ Deficit | ||||||||
| Preferred Stock, $par value; shares authorized; issued and outstanding | ||||||||
| Class A common stock, $ par value; shares authorized; shares issued and outstanding (excluding shares subject to possible redemption) | ||||||||
| Class B common stock, $ par value; shares authorized; shares issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Deficit | ( | ) | ( | ) | ||||
| Total Liabilities, Redeemable Class A Common Stock and Stockholders’ Deficit | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 1 |
VISION SENSING ACQUISITION CORP.
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Three Months Ended March 31, 2023 | For the Three Months Ended March 31, 2022 | |||||||
| Formation and operating costs | $ | ( | ) | $ | ( | ) | ||
| Loss from Operations | ( | ) | ( | ) | ||||
| Other Income (Expenses) | ||||||||
| Interest earned on marketable securities held in trust account | ||||||||
| Net Income (loss) before income tax | $ | $ | ( | ) | ||||
| Weighted average shares outstanding of Class A common stock | ||||||||
| Basic and diluted net income (loss) per common stock | $ | $ | ( | ) | ||||
| Weighted average shares outstanding of Class B common stock | ||||||||
| Basic and diluted net income (loss) per common stock | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited financial statements.
| 2 |
VISION SENSING ACQUISITION CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND
FOR THE THREE MONTHS ENDED MARCH 31, 2023
Class A Common Stock | Class B Common Stock | Additional Paid in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance – December 31, 2021 (Audited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance – March 31, 2022 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance – December 31, 2022 (Audited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||
| Additional amount deposited into trust ($ per common stock subject to possible redemption) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance – March 31, 2023 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 3 |
VISION SENSING ACQUISITION CORP.
STATEMENT OF CASH FLOWS
(UNAUDITED)
For the Three Months Ended March 31, 2023 | For the Three Months Ended March 31, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | $ | ( | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Interest earned on marketable securities held in Trust Account | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ||||||||
| Accounts payable and accrued offering costs | ||||||||
| Accrued expenses | ||||||||
| Franchise tax payable | ( | ) | ||||||
| Income tax payable | ||||||||
| Other receivable | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Interest withdraw from Trust Account | ||||||||
| Investment of cash in Trust Account | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Working capital loan | ||||||||
| Extension loan | ||||||||
| Proceeds from issuance of Class B common stock to Sponsor | ||||||||
| Proceeds from sale of Units, net of underwriting discount paid | ||||||||
| Proceeds from sale of private placement units | ||||||||
| Payment of offering costs | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ( | ) | ||||
| Cash at the beginning of the period | ||||||||
| Cash at the end of the period | $ | |||||||
The accompanying notes are an integral part of these unaudited financial statements.
| 4 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations
Vision Sensing Acquisition Corp. (the “Company”) is a blank check company incorporated in the State of Delaware on August 13, 2021. The Company was formed for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities (“Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of March 31, 2023, the Company had not commenced any operations. All activity for the period from August 13, 2021 (inception) through March 31, 2023 relates to the Company’s formation, the Offering (as defined below), the Company’s search for acquisition targets and due diligence, the negotiation of the Business Combination Agreement (as defined below) and assisting Newsight Imaging Ltd. in the preparation and filing of its Registration Statement on Form F-4 and amendments thereto. 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 Offering. The Company has selected December 31 as its fiscal year end.
The Company’s sponsor is Vision Sensing LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on October 29, 2021.
On
November 3, 2021, the Company consummated its Initial Public Offering of units (the “Units” and, with respect to
the Class A common stock included in the Units being offered, the “Public Shares”), at $ per Unit, generating gross
proceeds of $
Simultaneously
with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of units
(the “Private Placement Units”) to Vision Sensing LLC, the sponsor of the Company (the “Sponsor”), at a price
of $ per Private Placement Unit, generating total gross proceeds of $
Additionally,
on November 3, 2021, the Company consummated the closing of the sale of additional units at a price of $ per unit (the
“Units”) upon receiving notice of the underwriters’ election to fully exercise their overallotment option (“Overallotment
Units”), generating additional gross proceeds of $
Simultaneously
with the exercise of the overallotment, the Company consummated the Private Placement of an additional Private Placement Units
to Vision Sensing LLC, a Delaware limited liability company (the “Sponsor”), generating gross proceeds of $
A
total of $
| 5 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (Continued)
Transaction
costs of the Initial Public Offering with the exercise of the overallotment amounted to $
Following
the closing of the Initial Public Offering $
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Placement Units, although substantially all of the net proceeds are intended to be applied generally toward
consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that
together have a fair market value equal to at least
The
Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the
Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to
redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business
Combination only if the Company has net tangible assets of at least $
Proposed Business Combination
On August 30, 2022, the Company entered into a Business Combination Agreement (the “Original Business Combination Agreement” and as it has been amended and may be further amended or restated, the “Business Combination Agreement”) with Newsight Imaging Ltd., an Israeli company (“Newsight”), and Newsight MergerSub, Inc., a Delaware corporation and wholly owned subsidiary of Newsight (“Merger Sub”).
Pursuant to the Business Combination Agreement, at the closing (the “Closing”) of the transactions contemplated thereunder (collectively, the “Transactions”), and following the Recapitalization and the PIPE Investment (as each such term is defined and described in the Business Combination Agreement), (i) Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Newsight (the “Merger”); (ii) the common stock of the Company (including Class A common stock and Class B common stock) will be converted into ordinary shares of Newsight (“Newsight Ordinary Shares”) on a one-for-one basis; (iii) warrants to purchase the Company’s common stock will instead become eligible to purchase the same number of Newsight Ordinary Shares at the same exercise price and for the same exercise period; (iv) the Company will become a wholly owned subsidiary of Newsight; and (v) the Company will change its corporate name to Newsight HoldCo, Inc., and will have a restated certificate of incorporation appropriate for a private corporation.
| 6 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (Continued)
Prior
to the Closing, but subject to the completion of the Closing, Newsight will effect a recapitalization of its outstanding equity securities
(the “Recapitalization”) so that the only class of outstanding equity of Newsight will be the Newsight Ordinary Shares (and
certain options and warrants that are exercisable for Newsight Ordinary Shares). To effect the Recapitalization, (i) Newsight will effect
a recapitalization of the Newsight Ordinary Shares so that the holders of the then outstanding Newsight Ordinary Shares will have shares
valued at $ per share having a total value of $
The Business Combination Agreement and related agreements are further described in our Current Report on Form 8-K filed with the SEC on September 6, 2022.
On January 19, 2023, the Company, Newsight and Merger Sub entered into an Amendment No. 1 to Business Combination Agreement (the “First BCA Amendment”) to amend Article 40.1(a) of Exhibit H to the Original Business Combination Agreement (the form of Amended and Restated Articles of Association of Newsight that will become effective in connection with consummation of the Business Combination) to provide that the U.S. federal district courts will have exclusive jurisdiction to resolve complaints asserting a cause of action under the Securities Exchange Act of 1934, as amended. On January 29, 2023, the Company, Newsight and Merger Sub entered into Amendment No. 2 to Business Combination Agreement (the “Second BCA Amendment”) to amend the definition of “Outside Date” in Section 10.1 in the Original Business Combination Agreement to change the Outside Date from February 3, 2023 to May 3, 2023. The amendment extends the Outside Date to match the new deadline for the Company under its organizational documents to complete its initial business combination. Copies of the First BCA Amendment and Second BCA Amendment are attached as Exhibit 2.1.1 and 2.1.2 to this Quarterly Report and incorporated by reference herein.
Newsight Registration Statement on Form F-4
Newsight filed a Registration Statement on Form F-4 with the SEC on December 8, 2022 to register the issuance of the Newsight Ordinary Shares that will be issued at the consummation of the Business Combination, the warrants exercisable for Newsight Ordinary Shares that will result from the amendment of the Company’s public warrants at the consummation of the Business Combination and the Newsight Ordinary Shares issuable upon exercise of such warrants. Newsight filed an Amendment No. 1 thereto on January 20, 2023, an Amendment No. 2 thereto on February 13, 2023 and an Amendment No. 3 thereto on March 27, 2023. We use the term “Newsight Form F-4” to refer to the original registration statement as amended by the three amendments and as it may be subsequently further amended.
The
Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the
Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to
redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business
Combination only if the Company has net tangible assets of at least $
| 7 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (Continued)
The Company’s amended and restated certificate of incorporation originally provided that we have up to 12 months from the closing of our IPO, or until November 3, 2022, to consummate an initial business combination; however, if we anticipated that we may not be able to consummate a Business Combination within 12 months, we could, by resolution of our board of directors if requested by our sponsor, extend the period of time to consummate a Business Combination up to two times, each by an additional three months (for a total of up to 18 months, or until May 3, 2023), subject to our sponsor depositing additional funds into the trust account. As described in further detail in Note 8 below, On May 1, 2023, the Company’s stockholders approved an amendment to the Company’s amended and restated certificate of incorporation that allows our board of directors, if requested by our sponsor, to further extend the period of time to consummate a Business Combination by up to six 1-month extensions until November 3, 2023, subject to our sponsor depositing additional funds into the trust account.
Extensions
On
October 28, 2022 and again on February 2, 2023, at the request of our sponsor, our board of directors extended the period of time to
consummate a Business Combination to February 3, 2023 and May 3, 2023, respectively, our sponsor deposited $
If
the Company is unable to complete a Business Combination with Newsight or another Business Combination by June 5, 2023 (which can be
extended to November 3, 2023 if our sponsor deposits an additional $
| 8 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 1 — Description of Organization and Business Operations (Continued)
Liquidity and Management’s Plans
Prior to the completion of the Initial Public Offering, the Company lacked the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. The Company has since completed its Initial Public Offering at which time capital in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the Company for general working capital purposes. Accordingly, management has since re-evaluated the Company’s liquidity and financial condition and determined that sufficient capital exists to sustain operations through the earlier of the consummation of a Business Combination or one year from this filing and therefore substantial doubt has been alleviated. There is no assurance that the Company’s plans to consummate an initial Business Combination will be successful within the Combination Period. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
Management is currently evaluating 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 and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statement. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Additionally, as a result of the military action commenced in February 2022 by the Russian Federation and Belarus in the country of Ukraine and related economic sanctions, the Company’s ability to consummate a Business Combination, or the operations of a target business with which the Company ultimately consummates a Business Combination, may be materially and adversely affected. Further, the Company’s ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by these events, including as a result of increased market volatility, or decreased market liquidity in third-party financing being unavailable on terms acceptable to the Company or at all. The impact of this action and related sanctions on the world economy and the specific impact on the Company’s financial position, results of operations and/or ability to consummate a Business Combination are not yet determinable. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 2 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements are presented in U.S. Dollars and conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.
| 9 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (Continued)
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 auditor 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 financial statements in conformity with 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 statements and the reported amounts of revenues and expenses during the reporting period.
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 statements, 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.
Risks and Uncertainties
Management is currently evaluating 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 and/or search for a target company, the specific impact is not readily determinable as of the date of the financial statement. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Cash and Cash Equivalents
The
Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash
equivalents are carried at cost, which approximates fair value. The Company had $
| 10 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (Continued)
Income Taxes
The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC
Topic 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’s management determined the United States is the Company’s
only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income
tax expense. There were $
The provision for income taxes was deemed de minimis for the three months ended March 31, 2023.
Class A Common Stock Subject to Possible Redemption
All
of the Class A common stock sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption
of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection
with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation.
In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock that feature redemption
rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within
the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve the redemption and liquidation
of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a
maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would
cause its net tangible assets (stockholders’ equity) to be less than $
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution
which, at times may exceed the Federal depository insurance coverage of $
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
| 11 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 2 — Summary of Significant Accounting Policies (Continued)
Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock shares, by the weighted average number of Class A and Class B non-redeemable common stock shares outstanding for the period. Non-redeemable Class A and Class B common stock shares includes the Founder Shares and non-redeemable common stock shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
For the Three Months Ended March 31, 2023 | For the Three Months Ended March 31, 2023 | |||||||
| Class A common stock | ||||||||
| Numerator: net income (loss) allocable to Class A common stock | $ | $ | ( | ) | ||||
| Denominator: weighted average number of Class A common stock | ||||||||
| Basic and diluted net income (loss) per redeemable Class A common stock | $ | $ | ( | ) | ||||
| Class B common stock | ||||||||
| Numerator: net income (loss) allocable to non-redeemable Class B common stock | $ | ( | ) | $ | ( | ) | ||
| Denominator: weighted average number of Class B common stock | ||||||||
| Basic and diluted net income (loss) per Class B common stock | $ | ( | ) | $ | ( | ) | ||
Fair Value of Financial Instruments
The 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. This is the level that the Marketable Securities Held in Trust Account
are considered (being $ |
| ● | 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. |
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.
Recently Issued Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
| 12 |
VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 3 —Public Offering
Pursuant to the Initial Public Offering and full exercise underwriter’s overallotment option, the Company sold Units at a purchase price of $ per Unit. Each Unit consists of one common stock and three-quarters of one redeemable warrant (“Public Warrant”). Each Public Warrant will entitle the holder to purchase one common stock at an exercise price of $ per whole share (see Note 7).
Note 4 — Private Placement
Simultaneously
with the closing of the Initial Public Offering, the Company consummated the private sale (the “Private Placement”) of an
aggregate of units (the “Private Placement Units”) to Vision Sensing LLC (the “Sponsor”) at a purchase
price of $ per Private Placement Unit, generating gross proceeds to the Company in the amount of $
A portion of the proceeds from the Private Placement Units was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Units held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Units will be worthless.
The Private Placement Warrants (including the Class A common stock issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain exceptions.
Note 5 — Related Party Transactions
Class B Common Stock
On
September 2, 2021, the Company issued an aggregate of shares of Class B common stock (the “Founder Shares”) to
the Sponsor for an aggregate purchase price of $
Promissory Note — Related Party
On
August 31, 2021, the Sponsor issued an unsecured promissory note to the Company, pursuant to which the Company may borrow up to an aggregate
principal amount of $
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VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 5 — Related Party Transactions (Continued)
Related Party Loans
In
order to finance transaction costs in connection with a Business Combination, our Sponsor extended to us a line of credit of up to $
The
Sponsor deposited an additional $
Newsight Bridge Financing
In
connection with our entry into the Business Combination Agreement, we agreed to provide Newsight with up to $
Administrative Support Agreement
Commencing
on the date the Units are first listed on the Nasdaq, the Company has agreed to pay the Sponsor a total of $
Note 6 — Commitments and Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Units 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 Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of Initial Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, 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 the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
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VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 6 — Commitments and Contingencies (Continued)
Underwriters Agreement
The Company granted the underwriter a 45-day option to purchase up to additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The aforementioned option was exercised on November 3, 2021.
The
underwriter was paid a cash underwriting discount of two percent (%) of the gross proceeds of the Initial Public Offering, or $
On
November 3, 2021, the underwriters purchased an additional Option Units pursuant to the exercise of the over-allotment option.
The Option Units were sold at an offering price of $ per Unit, generating additional gross proceeds to the Company of $
Right of First Refusal
For a period beginning on the closing of this offering and ending 12 months from the closing of a business combination, we have granted EF Hutton, division of Benchmark Investments, LLC a right of first refusal to act as lead-left book running manager and lead left manager for any and all future private or public equity, convertible and debt offerings during such period. In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the effective date of the registration statement of which this prospectus forms a part.
Note 7 – Stockholders’ Equity
Preferred Shares — The Company is authorized to issue preferred shares with a par value of $ per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. At March 31, 2023, there were preferred shares issued or outstanding.
Class
A Common Stock — The Company is authorized to issue shares of Class A common stock with a par value of $
per share.
Class
B Common Stock — The Company is authorized to issue shares of Class B common stock with a par value of $ per
share.
Only holders of the Class B common stock will have the right to vote on the election of directors prior to the Business Combination. Holders of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by law. In connection with our initial business combination, we may enter into a stockholders agreement or other arrangements with the stockholders of the target or other investors to provide for voting or other corporate governance arrangements that differ from those in effect upon completion of the IPO.
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VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 7 – Stockholders’ Equity (Continued)
The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the then-outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with a Business Combination (net of the number of shares of Class A common stock redeemed in connection with a Business Combination), excluding any shares or equity-linked securities issued or issuable to any seller of an interest in the target to us in a Business Combination.
Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing of the Initial Public Offering. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.
The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its commercially reasonable efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies 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, the Company will not be required to file or maintain in effect a registration statement, but will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants:
| ● | in whole and not in part; | |
| ● | at
a price of $ | |
| ● | upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period to each warrant holder; and | |
| ● | if, and only if, the last reported sale price of the Class A Common Stock equals or exceeds $ per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to warrant holders. |
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VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 7 – Stockholders’ Equity (Continued)
If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Public Warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such Public Warrants. Accordingly, the Public Warrants may expire worthless.
The Private Placement Warrants will be identical to the Public Warrants underlying the Units being sold in the Initial Public Offering.
Note 8 – Subsequent Events
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred up to the date the audited financial statements were available to issue.
On
April 25, the Company withdrew $
Charter Amendment
In
a special meeting held on May 1, 2023, the Company’s stockholders approved a First Amendment (the “First Charter Amendment)
to the Company’s amended and restated certificate of incorporation (the “Existing Company Charter”), changing the structure
and cost of the Company’s right to extend the date (the “Termination Date”) by which the Company must either (i) cease
all operations except for the purpose of winding up or else (ii) as promptly as reasonably possible but not 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 (less up
to $
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VISION SENSING ACQUISITION CORP.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note 8 – Subsequent Events (Continued)
The First Charter Amendment allows the Company
to extend the Termination Date from May 3, 2023 by up to six 1-month extensions to November 3, 2023, provided that (i) the Company’s
Sponsor (or its affiliates or permitted designees) will deposit into the Company’s Trust Account the lesser of (x) $
In connection therewith, the Company entered into an amendment to the Trust Agreement,. The form of the Trust Agreement was initially filed as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-259766) for the Offering. The Trust Agreement was amended by Amendment No. 1 to Investment Management Trust Agreement dated May 1, 2023 by and between the Company and Continental, the form of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 2, 2023. A copy of the Amendment No. 1 to Investment Management Trust Agreement is attached as Exhibit 10.1 to this Quarterly Report and incorporated by reference herein.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References to the “Company,” “us,” “our” or “we” refer to Vision Sensing Acquisition Corp. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included herein.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward- looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph.
Overview
We are a blank check company formed under the laws of the State of Delaware on August 13, 2021. We were formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. While our efforts to identify a target business may span many industries and regions worldwide, we focus on companies with operations in vision sensing technologies. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and the private placement of the Private Units, the proceeds of the sale of our shares in connection with our initial Business Combination, shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination of the foregoing.
We expect to continue to incur significant costs in the pursuit of our initial Business Combination. We cannot assure you that our plans to complete our initial Business Combination will be successful.
Proposed Business Combination
On August 30, 2022, the Company entered into the Original Business Combination Agreement with Newsight, and MergerSub, which has since been amended on January 19, 2023 by the First BCA Amendment and again on January 29, 2023 by the Second BCA Amendment. We refer to the Original Business Combination Agreement as amended by the two amendments as the “Business Combination Agreement.”
Pursuant to the Business Combination Agreement, at the Closing of the Transactions contemplated thereunder, and following the Recapitalization and the PIPE Investment (as each such term is defined and described in the Business Combination Agreement), (i) Merger Sub will merge with and into the Company, with the Company continuing as the surviving entity and a wholly owned subsidiary of Newsight, which we refer to as the Merger; (ii) the common stock of the Company (including Class A common stock and Class B common stock) will be converted into Newsight Ordinary Shares on a one-for-one basis; (iii) warrants to purchase the Company’s common stock will instead become eligible to purchase the same number of Newsight Ordinary Shares at the same exercise price and for the same exercise period; (iv) the Company will become a wholly owned subsidiary of Newsight; and (v) the Company will change its corporate name to Newsight HoldCo, Inc., and will have a restated certificate of incorporation appropriate for a private corporation.
On January 19, 2023, the Company, Newsight and Merger Sub entered into the First BCA Amendment to amend Article 40.1(a) of Exhibit H to the Original Business Combination Agreement (the form of Amended and Restated Article of Association of Newsight that will become effective in connection with consummation of the Business Combination) to provide that the U.S. federal district courts will have exclusive jurisdiction to resolve complaints asserting a cause of action under the Securities Exchange Act of 1934, as amended. On January 29, 2023, the Company, Newsight and Merger Sub entered into the Second BCA Amendment to amend the definition of “Outside Date” in Section 10.1 in the Original Business Combination Agreement to change the Outside Date from February 3, 2023 to May 3, 2023.
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The Business Combination Agreement, as amended and related agreements are further described in our Current Report on Form 8-K filed with the SEC on September 6, 2022 and our Current Report on Form 8-K filed with the SEC on January 30, 2023 and in the Newsight Form F-4 described below.
Registration Statement
Newsight filed a Registration Statement on Form F-4 with the SEC on December 8, 2022 to register the issuance of the Newsight Ordinary Shares that will be issued at the consummation of the Business Combination, the warrants exercisable for Newsight Ordinary Shares that will result from the amendment of the Company’s public warrants at the consummation of the Business Combination and the Newsight Ordinary Shares issuable upon exercise of such warrants. Newsight filed an Amendment No. 1 thereto on January 20, 2023, an Amendment No. 2 thereto on February 13, 2023 and an Amendment No. 3 thereto on March 27, 2023. We use the term “Newsight Form F-4” to refer to the original registration statement as amended by the three amendments and as it may be subsequently further amended.
For further information regarding the Merger Agreement and our proposed initial Business Combination with Newsight, please refer to Note 1 of this Annual Report and the Newsight Form S-4.
Charter Amendment
In a special meeting held on May 1, 2023, the Company’s stockholders approved the First Charter Amendment to the Existing Company Charter changing the structure and cost of the Company’s right to extend the Termination Date, which is the date by which the Company must either (i) cease all operations except for the purpose of winding up or else (ii) as promptly as reasonably possible but not 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 (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 stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in the case of clause (ii) above to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
The First Charter Amendment allows the Company to extend the Termination Date from May 3, 2023 by up to six 1-month extensions to November 3, 2023, provided that (i) the Company’s Sponsor (or its affiliates or permitted designees) will deposit into the Company’s Trust Account the lesser of (x) $100,000 or (y) $0.045 per share for each Public Share outstanding as of the applicable deadline date for each such one-month extension until November 3, 2023 unless the closing of the Company’s initial business combination shall have occurred (the “Extension Payment”) in exchange for a non-interest bearing, unsecured promissory note payable upon consummation of a business combination. In connection with the approval of the First Charter Amendment on May 1, 2023, holders of 8,507,492 of the Company’s public shares exercised their right to redeem those shares for cash at an approximate price of $10.59 per share, for an aggregate of approximately $90.1 million, leaving 1,612,508 Company public shares outstanding after the May 1, 2023 stockholders meeting. Thus the price for each one-month extension is $72,562.86. The Company’s Sponsor deposited this amount into the Trust Account on May 1, 2023, so the Termination Date has been extended to Monday, June 5, 2023
In connection therewith, the Company entered into an amendment to the Trust Agreement. The form of the Trust Agreement was initially filed as an exhibit to the Company’s Registration Statement on Form S-1 (File No. 333-259766) for the Offering. The Trust Agreement was amended by Amendment No. 1 to Investment Management Trust Agreement dated May 1, 2023 by and between the Company and Continental, the form of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 2, 2023. A copy of the Amendment No. 1 to Investment Management Trust Agreement is attached as Exhibit 10.1 to this Quarterly Report and incorporated by reference herein.
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Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to March 31, 2023 were organizational activities, those activities necessary to prepare for the Initial Public Offering (“Initial Public Offering”), identifying a target company for a business combination and conducting due diligence, the negotiation of the Business Combination Agreement with Newsight and assisting Newsight the preparation and filing of the Newsight Form F-4 and amendments thereto. We do not expect to generate any operating revenues until after the completion of our business combination. We expect to generate non-operating income in the form of interest income on cash and marketable securities held after the Initial Public Offering. We expect that we will incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses in connection with completing a business combination.
For the three months ended March 31, 2023, we had a net income of $722,311, which consists of formation and operating costs of $396,395 and interest earned on investments held of $1,118,706. For the three months ended March 31, 2022, we had a net loss of $154,102, which consists of formation and operating costs of $164,446 and interest earned on investments held of $10,344.
Liquidity and Capital Resources
On November 3, 2021, we consummated our Initial Public Offering of 10,120,000 Units at a price of $10.00 per Unit, generating gross proceeds of $101,200,000. Simultaneously with the consummation of the initial public offering, we completed the private placement of an aggregate of 472,700 units to our sponsor at a purchase price of $10.00 per private placement unit, generating total gross proceeds of $4,727,000.
As of March 31, 2023, we had investments of $107,241,024 held in the Trust Accounts. We intend to use substantially all of the funds held in the Trust Accounts, including any amounts representing interest earned on the Trust Accounts (less taxes paid and deferred underwriting commissions) to complete our initial Business Combination. We may withdraw interest to pay taxes. During the period ended March 31, 2023, we did not withdraw any interest earned on the Trust Accounts. On April 25, we withdrew $212,514 from the funds held in the trust account to pay our 2022 annual franchise tax. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Accounts will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of March 31, 2023, we had cash of $250 outside of the Trust Accounts. We intend to use the funds held outside the Trust Accounts primarily to complete our initial Business Combination with Newsight.
In order to fund working capital deficiencies or finance transaction costs in connection with our initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Accounts to repay such loaned amounts but no proceeds from our Trust Accounts would be used for such repayment. Up to $1,500,000 of such loans may be convertible into units identical to the Placement Units, at a price of $10.00 per unit at the option of the lender. On August 9, 2022, we issued a non-interest-bearing promissory note to our sponsor for loans in the principal amount of up to $1,000,000, which is convertible into units as described above. The note matures on the earlier to occur of the consummation of our initial business combination or the date of winding up of our business. As of March 31, 2023, we had received total advances under this note in the principal amount of $363,875.
We issued two non-interest-bearing, unsecured promissory notes each in the principal amount of $1,012,000 to our sponsor on October 28, 2022 and February 2, 2023 to fund the two extensions to the deadline to complete our initial business combination as described above under the heading “Extensions” in Item 1 of Part 1 of this report. The notes mature on the earlier to occur of the consummation of our initial business combination or the date of winding up of our business. These notes are not convertible into units.
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If our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating our initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon consummation of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our initial Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Accounts. In addition, following our initial Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
In connection with our assessment of going concern considerations in accordance with FASB ASU 2014-15, “Disclosures of Uncertainties about an Entity’s ability to Continue as a Going Concern,” we have determined that if we are unable to raise additional funds to alleviate liquidity needs as well as complete a Business Combination by June 5, 2023 (or up to November 3, 2023 if our sponsor at the request of our board of directors deposits an additional $72,562.86 ($0.045 per public share) into the Trust Account for up to five 1-month extensions, which may be extended to such later date as may be approved by our stockholders in an amendment to our certificate of incorporation), then we will cease all operations except for the purpose of liquidating. The liquidity condition and the date for mandatory liquidation and subsequent dissolution raises substantial doubt about our ability to continue as a going concern. We plan to consummate a Business Combination prior to the mandatory liquidation date. No adjustments have been made to the carrying amounts of assets or liabilities should we be required to liquidate after June 5, 2023.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered any non-financial assets.
Contractual Obligations
On August 9, 2022, we issued a non-interest-bearing promissory note to our sponsor for loans in the principal amount of up to $1,000,000, which is convertible into units identical to the Placement Units, at a price of $10.00 per unit at the option of the lender. The note matures on the earlier to occur of the consummation of our initial business combination or the date of winding up of our business. As of March 31, 2023, we had received total advances under this note in the principal amount of $363,875.
We issued two non-interest-bearing, unsecured promissory notes each in the principal amount of $1,012,000 to our sponsor on October 28, 2022 and February 2, 2023 to fund the two extensions to the deadline to complete our initial business combination as described above under the heading “Extensions” in Item 1 of Part 1 of this report. The notes mature on the earlier to occur of the consummation of our initial business combination or the date of winding up of our business. These notes are not convertible into units.
On May 1, 2023, we issued a non-interest-bearing, unsecured promissory note to our sponsor in the principal amount of $72,562.86 to fund the first of up to six 1-month extensions of the deadline to complete our initial business combination from May 3, 2023 to June 5, 2023.
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Except for the notes issued to our sponsor described above, we do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee up to $10,000 for office space, utilities and secretarial and administrative support services. We began incurring these fees on November 3, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.
The underwriters are entitled to a deferred fee of $3,542,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Accounts solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies
This management’s discussion and analysis of our financial condition and results of operations is based on our audited financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these audited financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Net Loss Per Ordinary Share
Net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock shares outstanding for the period. The calculation of diluted income (loss) per share does not consider the effect of the warrants issued in connection with the Initial Public Offering and warrants issued as components of the Private Placement Units (the “Placement Warrants”) since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
Net loss per share, basic and diluted, for Class A and Class B non-redeemable common stock is calculated by dividing the net loss, adjusted for income attributable to Class A redeemable common stock shares, by the weighted average number of Class A and Class B non-redeemable common stock shares outstanding for the period. Non-redeemable Class A and Class B common stock shares includes the Founder Shares and non-redeemable common stock shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
Class A Common Stock Subject to Possible Redemption
All of the Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated certificate of incorporation. In accordance with ASC 480, conditionally redeemable Class A common stock (including shares of Class A common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001. However, the threshold in its charter would not change the nature of the underlying shares as redeemable and thus public shares would be required to be disclosed outside of permanent equity. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value ($10.15 per share) at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.
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On March 31, 2023, 10,120,000 shares of Class A Common Stock outstanding are subject to possible redemption. After redemptions of publicly held shares of our Class A Common Stock in connection with the First Charter Amendment on May 1, 2023, 1,612,508 shares of Class A Common Stock remain outstanding and subject to possible redemption.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Following the consummation of our Initial Public Offering, the net proceeds of our Initial Public Offering, including amounts in the Trust Account, have been invested in U.S. government treasury bills, notes or bonds with a maturity of 185 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we do not believe that there will be an associated material exposure to interest rate risk.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2023, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Management’s Report on Internal Controls over Financial Reporting
This Quarterly Report on Form 10-Q does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by the rules of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
During the most recently completed fiscal quarter ended March 31, 2023, there was no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the knowledge of our management team, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to include risk factors in this Report. However, below is a partial list of material risks, uncertainties and other factors that could have a material effect on the Company and its operations:
| ● | A new 1% U.S. federal excise tax could be imposed on us in connection with redemptions by us of our shares. | |
| ● | our ability to realize anticipated benefits of the Business Combination, and unanticipated expenses or delays in connection with the Business Combination. | |
| ● | we are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target; | |
| ● | we may not be able to select an appropriate target business or businesses and complete our initial business combination in the prescribed time frame; | |
| ● | our expectations around the performance of a prospective target business or businesses may not be realized; | |
| ● | we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination; | |
| ● | our officers and directors may have difficulties allocating their time between our Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination; | |
| ● | we may not be able to obtain additional financing to complete our initial business combination or reduce the number of shareholders requesting redemption; | |
| ● | we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time; | |
| ● | you may not be given the opportunity to choose the initial business target or to vote on the initial business combination; | |
| ● | trust account funds may not be protected against third party claims or bankruptcy; | |
| ● | an active market for our public securities’ may not develop and you will have limited liquidity and trading; | |
| ● | the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination; and | |
| ● | our financial performance following a business combination with an entity may be negatively affected by their lack an established record of revenue, cash flows and experienced management. |
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| ● | Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination and results of | |
| ● | If we pursue a target company with operations or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection with investigating, agreeing to and completing such initial business combination, and if we effect such initial business combination, we would be subject to a variety of additional risks that may negatively impact our operations. |
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
On November 3, 2021, simultaneously with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 426,500 units (the “Private Placement Units”) to Vision Sensing LLC, the sponsor of the Company (the “Sponsor”), at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $4,265,000 (the “Private Placement”). Additionally, on November 3, 2021, simultaneously with the exercise of the overallotment, the Company consummated the Private Placement of an additional 46,200 Private Placement Units to the Sponsor, generating gross proceeds of $462,000. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. The placement warrants included in the placement units are identical to the warrants sold as part of the units in this offering except that, so long as they are held by our sponsor or its permitted transferees, (i) they will not be redeemable by us, (ii) they (including the Class A common stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of our initial business combination, (iii) they may be exercised by the holders on a cashless basis, and (iv) will be entitled to registration rights.
Use of Proceeds from the Public Offering
On November 3, 2021, the Company consummated its Initial Public Offering of 8,800,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $88,000,000, and incurring offering costs of $7,520,024, of which $3,542,000 was for deferred underwriting commissions (which amount includes deferred underwriting commissions attributable to the exercise of the underwriters’ election of their over-allotment option, as described below). The Company granted the underwriter a 45-day option to purchase up to an additional 1,320,000 Units at the Initial Public Offering price to cover over-allotments.
Additionally, on November 3, 2021, the Company consummated the closing of the sale of 1,320,000 additional units at a price of $10.00 per unit (the “Units”) upon receiving notice of the underwriters’ election to fully exercise their overallotment option (“Overallotment Units”), generating additional gross proceeds of $13,200,000 and incurred additional offering costs of $264,000 in underwriting fees. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share (“Class A Common Stock”), and three-quarters of one redeemable warrant of the Company (“Warrant”), with each whole Warrant entitling the holder thereof to purchase one share of Class A Common Stock for $11.50 per share.
The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-259766). The SEC declared the registration statement effective on October 29, 2021.
Of the gross proceeds received from the Initial Public Offering and the Private Placement Units, $102,718,000 was placed in a Trust Account. We paid a total of $2,024,000 in underwriting discounts and commissions and $436,024 for other costs and expenses related to the Initial Public Offering. In addition, the underwriters agreed to defer $3,542,000 in underwriting discounts and commission.
Following the closing of the Initial Public Offering and full exercise of underwriter’s over-allotment option, $953,522 of cash was held outside of the Trust Account available for working capital purposes.
On October 28, 2022, at the request of our sponsor, our board of directors extended the period of time to consummate a Business Combination to February 3, 2023, our sponsor deposited $1,012,000 (representing $0.10 per public unit sold in our initial public offering) into the trust account, and we issued to our sponsor a non-interest bearing, unsecured promissory note in that amount. On February 2, 2023, at the request of our sponsor, we extended period of time to consummate a Business Combination a second time to May 3, 2023, our sponsor deposited $1,012,000 (representing $0.10 per public unit sold in our initial public offering) into the trust account, and we issued to our sponsor a second non-interest bearing, unsecured promissory note in that amount. If we do not complete the Business Combination with Newsight or another business combination by May 3, 2023 (which may be extended to such later date as may be approved by our stockholders in an amendment to our certificate of incorporation), then our existence will terminate, and we will distribute all amounts in the Trust Account.
As of March 31, 2023, we have available to us $250 of cash on our balance sheet and a working capital of $100,171,572.
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
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. | |
| ** | Furnished. |
| (1) | Incorporated by reference to Exhibit 2.1.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 24, 2023. |
| (2) | Incorporated by reference to the Company’s Form 8-K filed with the SEC on January 30, 2023. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VISION SENSING ACQUISITION CORP. | ||
| Date: May 15, 2023 | By: | /s/ George Peter Sobek |
| George Peter Sobek | ||
| Chief Executive Officer | ||
| Date: May 15, 2023 | By: | /s/ Hang Kon Louis Ma |
Hang Kon Louis Ma Chief Financial Officer |
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