UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-Q
 
(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023
 
OR


TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to
 
TWIN RIDGE CAPITAL ACQUISITION CORP.
 (Exact name of registrant as specified in its charter)



Cayman Islands
001-40157
98-1577338
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification Number)

999 Vanderbilt Beach Road, Suite 200
Naples, Florida
  
34108
(Address of principal executive offices)
 
(Zip Code)

(212) 235-0292
 (Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Units, each consisting of one Class A Ordinary Share, $0.0001 par value, and one-third of one redeemable warrant
 
TRCA.U*
 
New York Stock Exchange
Class A Ordinary Shares included as part of the units
 
TRCA*
 
New York Stock Exchange
Redeemable warrants included as part of the units, each whole warrant exercisable for one Class A Ordinary Share at an exercise price of $11.50
 
TRCA WS*
 
New York Stock Exchange

*Delisted pursuant to the Form 25 filed by The New York Stock Exchange on November 3, 2023.

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. Yes ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data 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 such files). Yes ☒  No ☐
 
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
Non-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). Yes No ☐
 
As of November 2, 2023, immediately prior to being merged out of existence, 6,266,645 Class A ordinary shares, par value $0.0001 per share (the “Class A ordinary shares”), and 5,327,203 Class B ordinary shares, par value $0.0001 per share (the “Class B ordinary shares”), were issued and outstanding.



TWIN RIDGE CAPITAL ACQUISITION CORP.
Quarterly Report on Form 10-Q

TABLE OF CONTENTS

 
Page
No.
1
   
 
Item 1.
1
       
   
1
       
   
2
       
   
3
       
   
4
       
   
5
       
 
Item 2.
23
       
 
Item 3.
27
       
 
Item 4.
27
       
28
   
 
Item 1.
28
       
 
Item 1A.
28
       
 
Item 2.
28
       
 
Item 3.
28
       
 
Item 4.
28
       
 
Item 5.
28
       
 
Item 6.
28
       
29

PART I - FINANCIAL INFORMATION

Item 1.
Financial Statements.

TWIN RIDGE CAPITAL ACQUISITION CORP.
CONDENSED BALANCE SHEETS

   
September 30,
2023
   
December 31,
2022
 
    (Unaudited)        
Assets
           
Cash
 
$
51,480
    $ 1,032,620  
Prepaid expenses
   
34,733
      74,994  
Due from related party, net
          12,526  
Total current assets
   
86,213
      1,120,140  
Marketable securities held in Trust Account
   
67,119,490
      216,069,362  
Total Assets
 
$
67,205,703
    $ 217,189,502  
                 
Liabilities and Shareholders’ Deficit
               
Current liabilities:
               
Accounts payable
  $ 8,962,308     $ 4,427,004  
Due to related party, net 
    1,162        
Promissory note - related party
   
1,120,000
       
Total current liabilities
   
10,083,470
      4,427,004  
Warrant liability
   
931,409
      376,312  
Commitment fee shares liability
   
151,049
      147,469  
Total Liabilities
   
11,165,928
      4,950,785  
                 
Commitments
     
         
Class A ordinary shares subject to possible redemption, 6,266,645 shares and 21,308,813 shares at redemption value of approximately $10.71 and $10.14 at September 30, 2023 and December 31, 2022, respectively
   
67,119,490
      216,069,362  
                 
Shareholders’ Deficit:
               
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022, respectively
   
       
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 6,266,645 and 21,308,813 shares subject to possible redemption at September 30, 2023 and December 31, 2022, respectively)
   
       
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,327,203 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
   
533
      533  
Additional paid-in capital
   
718,478
      5,336,153  
Accumulated deficit
   
(11,798,726
)
    (9,167,331 )
Total Shareholders’ Deficit
   
(11,079,715
)
    (3,830,645 )
                 
Total Liabilities and Shareholders’ Deficit
 
$
67,205,703
    $ 217,189,502  

The accompanying notes are an integral part of the unaudited condensed financial statements.

TWIN RIDGE CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
   
2023
   
2022
   
2023
   
2022
 
                         
Formation and operating costs
 
$
3,294,176
    $ 196,135     $ 5,570,443    
$
631,929
 
Loss from operations
   
(3,294,176
)
    (196,135 )     (5,570,443 )    
(631,929
)
                                 
Other income:
                               
Change in fair value of commitment fee shares
    6,124             (3,580 )      
Change in fair value of warrant liabilities
   
(247,266
)
    489,003       (555,097 )    
6,622,103
 
Trust interest income
   
860,346
      937,158       3,497,725      
1,169,625
 
Total other income, net
   
619,204
      1,426,161       2,939,048      
7,791,728
 
                                 
Net (loss) income
 
$
(2,674,972
)
  $ 1,230,026     $ (2,631,395 )  
$
7,159,799
 
Basic and diluted weighted average shares outstanding, ordinary shares subject to redemption
   
6,266,645
      21,308,813       10,068,512      
21,308,813
 
Basic and diluted net (loss) income per share
 
$
(0.23
)
  $ 0.05     $ (0.17 )  
$
0.27
 
Basic and diluted weighted average shares outstanding, ordinary shares
   
5,327,203
      5,327,203       5,327,203      
5,327,203
 
Basic and diluted net (loss) income per share
 
$
(0.23
)
  $ 0.05     $ (0.17 )  
$
0.27
 

The accompanying notes are an integral part of the unaudited condensed financial statements.

TWIN RIDGE CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023
 
   
Class A
Ordinary Shares
   
Class B
Ordinary Shares
   
Additional
Paid-in
Capital
   
Accumulated
Deficit
   
Total
Shareholders’
Deficit
 
   
Shares
   
Amount
   
Shares
   
Amount
   
             
Balance – December 31, 2022
   
   
$
     
5,327,203
   
$
533
   
$
5,336,153
   
$
(9,167,331
)
 
$
(3,830,645
)
                                                         
Remeasurement of Class A ordinary shares to redemption value
   
     
     
     
     
(2,336,163
)
   
     
(2,336,163
)
                                                         
Net loss
   
     
     
     
     
     
(123,182
)
   
(123,182
)
                                                         
Balance – March 31, 2023 (Unaudited)
   
     
     
5,327,203
     
533
     
2,999,990
     
(9,290,513
)
   
(6,289,990
)
                                                         
Remeasurement  of Class A ordinary shares to redemption value
                            (941,166 )           (941,166 )
                                                         
Net income
                                  166,759       166,759  
                                                         
Balance – June 30, 2023 (Unaudited)
       
      5,327,203       533       2,058,824       (9,123,754 )     (7,064,397 )
                                                         
Remeasurement  of Class A ordinary shares to redemption value
                            (1,340,346 )           (1,340,346 )
                                                         
Net loss                                   (2,674,972 )     (2,674,972 )
                                                         
Balance – September 30, 2023 (Unaudited)
        $
      5,327,203     $ 533     $ 718,478     $ (11,798,726 )   $ (11,079,715 )

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 
 
   
Class A
Ordinary Shares
   
Class B
Ordinary Shares
   
Additional
Paid-in
Capital
   
Accumulated
Deficit
   
Total
Shareholders’
Deficit
 
   
Shares
   
Amount
   
Shares
   
Amount
   
             
Balance – December 31, 2021
   
   
$
     
5,327,203
   
$
533
   
$
   
$
(14,283,016
)
 
$
(14,282,483
)
                                                         
Remeasurement of Class A ordinary shares to redemption value
                                  (5,256 )     (5,256 )
                                                         
Net income
   
     
     
     
     
     
3,967,813
     
3,967,813
 
                                                         
Balance – March 31, 2022 (Unaudited)
   
     
     
5,327,203
     
533
     
     
(10,320,459
)
   
(10,319,926
)
                                                         
Remeasurement of Class A ordinary shares to redemption value
                                  (227,211 )     (227,211 )
                                                         
Net income
                                  1,961,960       1,961,960  
                                                         
Balance – June 30, 2022 (Unaudited)
                5,327,203       533             (8,585,710 )     (8,585,177 )
                                                         
Remeasurement of Class A ordinary shares to redemption value
                                  (937,158 )     (937,158 )
                                                         
Net income
                                  1,230,026       1,230,026  
                                                         
Balance – September 30, 2022 (Unaudited)
        $       5,327,203     $ 533     $     $ (8,292,842 )   $ (8,292,309 )


The accompanying notes are an integral part of the unaudited condensed financial statements.
 
TWIN RIDGE CAPITAL ACQUISITION CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

   
For the Nine Months Ended
September 30,
 
   
2023
   
2022
 
             
Cash Flows from Operating Activities:
           
Net (loss) income
  $ (2,631,395 )  
$
7,159,799
 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
               
Trust interest income
    (3,497,725 )     (1,169,625 )
Change in fair value of warrant liabilities
    555,097      
(6,622,103
)
Change in fair value of commitment fee shares
    3,580      
 
Changes in current assets and liabilities:
               
Prepaid expenses
    40,261      
214,083
 
Accounts payable
    4,535,304      
(101,708
)
Due from related party
    12,526       (1,984 )
Due to related party
    1,162      
(222
)
Net cash used in operating activities
    (981,190 )    
(521,760
)
                 
Cash Flows from Investing Activities:
               
Principal deposited into Trust Account
    (1,120,000 )      
Cash withdrawn from trust in connection with redemption
    153,567,597      
 
Net cash provided by investing activities
    152,447,597      
 
                 
Cash Flows from Financing Activities:
               
Redemption of Class A Shares
    (153,567,547 )    
 
Proceeds from issuance of promissory note to related party
    1,120,000      
 
Net cash used in financing activities
    (152,447,547 )    
 
                 
Net Change in Cash
    (981,140 )    
(521,760
)
Cash Beginning
    1,032,620      
1,714,922
 
Cash Ending
  $ 51,480    
$
1,193,162
 
                 
Non-Cash Investing and Financing Activities:
               
Remeasurement of Class A ordinary shares subject to possible redemption
  $ 4,617,675    
$
1,169,625
 
 
The accompanying notes are an integral part of the unaudited condensed financial statements.

TWIN RIDGE CAPITAL ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
NOTE 1.
ORGANIZATION AND BUSINESS OPERATIONS

Organization and General

Twin Ridge Capital Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on January 7, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities (an “Initial Business Combination”). The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

The Company has selected December 31 as its fiscal year end.

As of September 30, 2023, the Company had not commenced any operations. All activity for the period from January 7, 2021 (inception) through September 30, 2023 relates to the Company’s formation and our initial public offering (“IPO”) described below, and, since the closing of the IPO on March 8, 2021, the search for a prospective Initial Business Combination. The Company will not generate any operating revenues until after the completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO and will recognize changes in the fair value of warrant liabilities and other financial instruments as other income (expense).

The Company’s sponsor is Twin Ridge Capital Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).

Business Combination

On November 3, 2023 (the “Closing Date”), the Company, Carbon Revolution Public Limited Company (formerly known as Poppetell Limited), a public limited company incorporated in Ireland with registered number 607450 (“MergeCo”), Carbon Revolution Limited, an Australian public company with Australian Company Number (ACN) 128 274 653 listed on the Australian Securities Exchange (“Carbon Revolution”) and Poppettell Merger Sub, a Cayman Islands exempted company and wholly-owned subsidiary of MergerCo (“MergerSub” and, together with the Company, MergeCo and Carbon Revolution, the “Parties”), consummated the business combination pursuant to the terms of a Business Combination Agreement (defined below), dated November 29, 2022, as amended or supplemented from time to time, pursuant to which, among other things, the Company merged with and into MergerSub, with MergerSub surviving as a wholly-owned subsidiary of MergeCo, with shareholders of the Company receiving Carbon Revolution Ordinary Shares (defined below), in exchange for their existing ordinary shares of the Company and existing warrant holders of the Company having their warrants automatically exchanged by assumption by MergeCo of the obligations under such warrants, including to become exercisable for one-tenth of a Carbon Revolution Ordinary Share instead of ordinary share of the Company, in proportion to the exchange ratio of one Carbon Revolution Ordinary Share for every ten ordinary shares of the Company (the “Business Combination”). In addition, the Company, Carbon Revolution and MergeCo implemented a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) in accordance with the Scheme Implementation Deed, dated as of November 30, 2022 as amended or supplemented from time to time (the “Scheme Implementation Deed”), which resulted in all shares of Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing one share to the MergeCo (resulting in Carbon Revolution becoming a wholly-owned subsidiary of MergeCo) and MergeCo issuing Carbon Revolution Ordinary Shares to the shareholders of Carbon Revolution. The MergeCo had no operations prior to entering into the Scheme Implementation Deed and Business Combination Agreement. The MergeCo’s sole purpose was to become a holding company following the Business Combination. Upon the closing of the Business Combination, MergeCo became the direct parent of Carbon Revolution. MergeCo’s ordinary shares, par value $0.0001 (“Carbon Revolution Ordinary Shares”) and the warrants to acquire one-tenth of a Carbon Revolution Ordinary Share at an exercise price of $11.50 per one-tenth of a Carbon Revolution Ordinary Share ($115.00 per whole Carbon Revolution Ordinary Share) (“Carbon Revolution Public Warrants”) are trading on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “CREV” and“CREVW”, respectively. The Carbon Revolution Public Warrants may only be exercised for a whole number of ordinary shares.

Business prior to the Business Combination
 
Except as the context otherwise requires, the following description relates to periods prior to the consummation of the Business Combination, which occurred on November 3, subsequent to the end of the period covered by this Quarterly Report on Form 10-Q.

Financing

The registration statement for the Company’s IPO was declared effective on March 3, 2021. On March 8, 2021, the Company consummated the IPO of 20,000,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $200,000,000, which is discussed in Note 3.

Simultaneously with the closing of the IPO, the Company consummated the sale of 4,933,333 warrants (the “Private Placement Warrants”) at a price of $1.50 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $7,400,000, which is discussed in Note 4.

Transaction costs amounted to $11,551,318 consisting of $4,000,000 of underwriting discount, $7,000,000 of deferred underwriting discount, and $551,318 of other offering costs.

The Company granted the underwriters in the IPO a 45-day option to purchase up to 3,000,000 additional Units to cover over-allotments, if any. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813 Units, generating an aggregate of gross proceeds of $13,088,130, and incurred $261,764 in cash underwriting fees and $458,085 in deferred underwriting fees.

Trust Account

Following the closing of the IPO on March 8, 2021 and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”), which can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”) which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, if any, the Company’s amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, provide that the proceeds from the IPO and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the Company’s public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the Company’s public shares if the Company does not complete its Initial Business Combination within 24 months from the closing of the IPO ( the “Combination Period” ) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the Company’s public shares if the Company has not consummated its Business Combination within the Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an Initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within the Combination Period, with respect to such Class A ordinary shares so redeemed. Following the Extension Meeting (as defined below), the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. The funds in the Trust Account will be maintained in cash in an interest-bearing deposit account until the earlier of the Company’s Initial Business Combination or its liquidation. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.

Initial Business Combination

The Company must complete one or more Initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the Initial Business Combination. However, the Company will complete the Initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company  Act. There is no assurance that the Company will be able to complete a Business Combination successfully.

The ordinary shares subject to redemption are recorded at a redemption value and classified as temporary equity upon the completion of the IPO, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”).

If the Company has not consummated an Initial Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than 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 the Company to pay its taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board of directors (the “Board”), liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

The Sponsor, officers and directors have agreed to (i) waive their redemption rights with respect to their Founder Shares (as defined below and described in Note 5), (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association, (iii) waive their rights to liquidating distributions from the Trust Account with respect any Founder Shares they hold if the Company fails to consummate an Initial Business Combination within the Combination Period (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete its Initial Business Combination within the Combination Period), and (iv) vote their Founder Shares and public shares in favor of the Initial Business Combination.

The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to reductions in the value of the trust assets, in each case net of the interest that may be withdrawn to pay the Company’s tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended, (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

The Company consummated its initial Business Combination on November 3, 2023.

Business Combination Agreement and Scheme Implementation Deed

On November 29, 2022, the Parties entered into a Business Combination Agreement, and on November 30, 2022, Carbon Revolution, the Company and MergeCo entered into a Scheme Implementation Deed.

Under the Scheme Implementation Deed, Carbon Revolution proposed a scheme of arrangement under Part 5.1 of the Corporations Act 2001 (Cth) (the “Corporations Act”) subject to any alterations or conditions made or required by the  Federal Court of Australia or such other court of competent jurisdiction under the Corporations Act agreed to in writing by the Company and Carbon Revolution under subsection 411(6) of the Corporations Act and agreed to in writing by Carbon Revolution, the Company and MergeCo (the “Scheme”) and a capital reduction under Part 2J.1 of the Corporations Act 2001 (Cth) which, if implemented, will result in all shares of Carbon Revolution being cancelled in return for consideration, with Carbon Revolution issuing a share to MergeCo (resulting in Carbon Revolution becoming a wholly-owned subsidiary of MergeCo) and MergeCo issuing shares to the shareholders of Carbon Revolution, subject to approval from Carbon Revolution’s shareholders, approval of the Federal Court of Australia and the satisfaction of various other conditions (a full list of the conditions is set out in the Scheme Implementation Deed).

The Business Combination Agreement provides for the Business Combination, pursuant to which, among other things, the Company shall be merged with and into MergerSub, with Merger Sub surviving as a wholly-owned subsidiary of MergeCo (the “Merger”), subject to, among other things, the approval of the Company’s shareholders.

The transactions contemplated by the Business Combination Agreement and the Scheme Implementation Deed (the “Transactions”) were consummated subject to the deliverables and provisions as further described in the Business Combination Agreement.

Upon implementation of the Scheme, the Carbon Revolution non-executive directors were appointed to MergeCo’s board of directors (Jake Dingle is already on MergeCo’s board of directors), as were four additional independent non-executive directors identified by Carbon Revolution’s board of directors and the Company who will bring significant additional expertise to MergeCo’s board of directors. The Company agreed not to exercise its right to appoint two additional directors under the Scheme Implementation Deed on the basis that offers were made to each of these additional independent non-executive directors and any two of these four additional independent non-executive directors agreed to join MergeCo’s board of directors. Ronan Donohoe and Rolando Ebuna resigned upon implementation of the Scheme.

Amendment to Scheme and Amendment to Business Combination Agreement

On September 21, 2023, the parties agreed to amend the Scheme attached to the Scheme Implementation Deed and on October 4, 2023, the parties agreed to further revise the Scheme attached to the Scheme Implementation Deed and the Business Combination Agreement (the “Amendments”). Under the terms of the Amendments taken together, the parties agreed to revise the merger ratios from 0.00877 ordinary shares of MergeCo, par value $0.0001 (“MergeCo Ordinary Shares”), per Carbon Revolution ordinary share to between 0.00640 and 0.00643 MergeCo Ordinary Shares per fully paid ordinary share in the capital of Carbon Revolution (“Carbon Revolution Share”) (depending on the redemption rate of Twin Ridge Class A ordinary shares, and 0.10 MergeCo Ordinary Shares per Twin Ridge Class A Ordinary Share and Class B ordinary shares of the Company, par value $0.0001, subject to obtaining a necessary order of the Federal Court of Australia and any alterations or conditions made or required by the court. Any fractional shares resulting from the conversion will be rounded down to the nearest whole number. In addition, the End Date (as defined in the Scheme Implementation Deed) in the Scheme Implementation Deed was amended to be November 30, 2023 and the parties consented to the OIC financing described in the additional definitive proxy materials of MergeCo filed with the U.S. Securities and Exchange Commission (“SEC”) on September 25, 2023 and the entry into fee deferral arrangements with various advisors and other vendors to Carbon Revolution, MergeCo and the Company with respect to certain transaction expenses.

The merger ratios were agreed to be amended on October 5, 2023 subject to the order of the Federal Court of Australia to reduce the total number of MergeCo Ordinary Shares to be issued in the Business Combination (as defined below) on a one share per ten share basis, affecting all recipients of MergeCo Ordinary Shares equally. Accordingly, the relative share ownership of holders of Twin Ridge Class A Ordinary Shares who do not redeem, holders of Carbon Revolution ordinary shares, holders of Carbon Revolution performance rights and Yorkville Advisors Global, LP, as well as the percentage of shares issuable pursuant to the FY2023 Incentive Equity Plan or upon exercise of any warrants, shall be unaffected by the adjustment of the merger ratios, except for minor adjustments due to the treatment of fractional shares. Such adjustment is intended to result in a higher trading price for MergeCo Ordinary Shares without altering any of the economic terms of the Business Combination.

Related Agreements

Letter Agreement

On June 12, 2023, the Company, Carbon Revolution, MergeCo and Merger Sub entered into a letter agreement (the “Letter Agreement”), pursuant to which Carbon Revolution agreed to be responsible for reasonable costs, fees, disbursements and other expenses incurred by or on behalf of the Company in the ordinary course of business, including costs, fees, disbursements and expenses relating to performing under, complying with and consummating the Transactions (as defined in the Business Combination Agreement) from the time the Company no longer has sufficient funds to satisfy such expenses until the closing of the Business Combination with Carbon Revolution. Additionally, the Letter Agreement extended the End Date (as defined in the Scheme Implementation Deed) to October 31, 2023.

Sponsor Side Letter


Concurrently with the execution of the Business Combination Agreement and the Scheme Implementation Deed, the Sponsor, Twin Ridge Capital Sponsor Subsidiary Holdings LLC (“TRCA Subsidiary”), Alison Burns (“Burns”), Paul Henrys (“Henrys”) and Gary Pilnick (“Pilnick” together with Burns and Henrys, the “Independent Directors”) and Dale Morrison (“Morrison”), Sanjay K. Morey (“Morey”) and William P. Russell, Jr. (“Russell”, and together with Morrison and Morey, the “Other Insiders”, and together with Sponsor, TRCA Subsidiary and the Independent Directors, the “Sponsor Parties”), the Company, Carbon Revolution and MergeCo entered into a Sponsor Side Letter (the “Sponsor Side Letter”), pursuant to which the Sponsor Parties have agreed to take, or not take, certain actions during the period between the execution of the Sponsor Side Letter and the consummation of the Merger, including, (i) to vote any ordinary shares of the Company owned by such Sponsor Party (all such shares, the “Covered Shares”) in favor of the Merger and the Scheme and other related proposals at the shareholders’ meeting of the Company, and any other special meeting of the Company’s shareholders called for the purpose of soliciting stockholder approval in connection with the consummation of the Merger and the Scheme, (ii) to waive the anti-dilution rights or similar protections with respect to the Class B ordinary shares owned by such party as set forth in the governing documents of the Company, or otherwise, and (iii) not to redeem any Covered Shares (as defined in the Sponsor Side Letter) owned by such Sponsor Party.

Pursuant to the Sponsor Side Letter, Sponsor has also agreed that, immediately prior to the consummation of the Merger, and conditioned upon the consummation of the Merger, 327,203 of the 5,267,203 Class B ordinary shares beneficially owned by Sponsor shall be automatically forfeited and surrendered to the Company for no additional consideration.


Standby Equity Purchase Agreement


Concurrently with the parties entering into the Business Combination Agreement and Scheme Implementation Deed, the Company entered into a Standby Equity Purchase Agreement (the “CEF”) with YA II PN, Ltd. (“Yorkville”) pursuant to which, subject to the consummation of the Transactions, MergeCo has the option, but not the obligation, to issue, and Yorkville shall subscribe for, an aggregate amount of up to $60 million of ordinary shares of MergeCo (“MergeCo Ordinary Shares”) at the time of MergeCo’s choosing during the term of the agreement, subject to certain limitations, including caps on exchanges, issuances and subscriptions based on trading volumes. Each advance under the CEF (an “Advance”) may be in an amount of MergeCo Ordinary Shares up to the greater of $10 million or the aggregate daily trading volume of MergeCo Ordinary Shares in the five trading days prior to MergeCo requesting an Advance. The purchase price for an Advance is determined at the option of MergeCo and is either (a) 95% of the average daily VWAP (as defined below) during the applicable one-day pricing period or (b) 97% of the lowest daily VWAP during the applicable three consecutive trading day pricing period. “VWAP” means, for any trading day, the daily volume weighted average price of MergeCo Ordinary Shares for such date on the securities listing exchange that the MergeCo Ordinary Shares are trading as of such date during regular trading hours as reported by Bloomberg L.P. The CEF will continue for a term of three years commencing from the sixth trading day following the closing of the Business Combination, unless prior terminated pursuant to its terms.

Extension Meeting

On March 6, 2023, the Company held an extraordinary general meeting of shareholders (the “Extension Meeting”) to amend its amended and restated memorandum and articles of association to extend the date by which it has to consummate an initial Business Combination to March 8, 2024, as applicable under the Amended and Restated Articles of Association. Carbon Revolution or the Sponsor (or one or more of their affiliates, members or third-party designees) will deposit $160,000 into the Trust Account for each such monthly extension, for an aggregate deposit of up to $1,440,000 (if all nine additional monthly extensions are exercised), in exchange for a non-interest bearing, unsecured promissory note issued by the Company to Carbon Revolution. As of September 30, 2023, $1,120,000 has been deposited into the Trust Account. As of the issuance date of these financial statements, an aggregate amount of $1,280,000 has been deposited into the Trust Account.

On March 10, 2023, the Company issued an unsecured promissory note in the total principal amount of up to $1,500,000 (the “Promissory Note”) to Carbon Revolution. The Promissory Note does not bear interest and matures upon closing of the Company’s initial Business Combination. In the event that the Company does not consummate a Business Combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. The proceeds of the Promissory Note will be deposited in the Trust Account. As of September 30, 2023, there was $1,120,000 outstanding under the Promissory Note. Subsequent to the nine-month period ended September 30, 2023 and as of the issuance date of these financial statements, the Company has drawn an additional $160,000 under the Promissory Note for a monthly extension through November 8, 2023.

In connection with that vote, the holders of 15,042,168 Class A ordinary shares of the Company properly exercised their right to redeem their shares for an aggregate redemption amount of approximately $153,567,547 or approximately $10.21 per share. After the satisfaction of such redemptions and receipt of the initial deposit of $480,000 to the Trust Account, the balance in the Trust Account was approximately $64,457,034.

Certain purported shareholders of the Company sent demand letters (the “Demands”) alleging deficiencies and/or omissions in the Registration Statement on Form F-4, filed by Carbon Revolution with the U.S. Securities and Exchange Commission (the “SEC”) initially on February 27, 2023 (as may be further amended). The Demands seek additional disclosures to remedy these purported deficiencies. The Company believes that the allegations in the Demands are meritless.

General Meeting

On October 12, 2023, the Company held an extraordinary general meeting of its shareholders (the “General Meeting”), at which holders of 10,445,986 ordinary shares held of record as of August 25, 2023, the record date for the General Meeting (the “Record Date”), were present in person or by proxy, representing approximately 90.09% of the voting power of Twin Ridge’s ordinary shares as of the Record Date, and constituting a quorum for the transaction of business. The proposals listed below are defined and described in greater detail in Twin Ridge’s definitive proxy statement, which was filed with the SEC on September 11, 2023, as supplemented by the additional definitive proxy materials filed on September 25, 2023 and October 5, 2023. The shareholders approved the Business Combination Proposal, the Merger Proposal, and the Equity Incentive Proposal.

In connection with the General Meeting and the Business Combination, the holders of 6,201,815 of Twin Ridge’s outstanding Class A ordinary shares, par value $0.0001 per share exercised their right to redeem their shares for cash at a redemption price of approximately $10.77 per share, for an aggregate redemption amount of approximately $66,773,355.

Going Concern and Liquidity

As of September 30, 2023, the Company had approximately $51,000 in its operating bank account and working capital deficit of approximately $10.0 million.

Until the consummation of an Initial Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating, and consummating the Initial Business Combination.

The Company may need to raise further additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

The Company had until March 8, 2024, as applicable under the Amended and Restated Articles of Association to consummate an Initial Business Combination. The Company’s management has determined that the liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the Company’s carrying amounts of assets or liabilities. As noted above, the Company’s Initial Business Combination was consummated on November 3, 2023.

Risks and Uncertainties

The Company’s results of operations and our ability to complete a Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control. Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19 pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the current conflicts in Ukraine and Israel. The Company cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete a Business Combination.
 
The Company is exposed to volatility in the banking market. At various times, we could have deposits with certain U.S. banks in excess of the maximum amounts insured by the U.S. Federal Deposit Insurance Corporation (“FDIC”). On March 10, 2023, Silicon Valley Bank became insolvent. State regulators closed the bank and the FDIC was appointed as its receiver. The Company did not hold any deposits with Silicon Valley Bank as of September 30, 2023 and December 31, 2022. On May 1, 2023, First Republic Bank was forced to close and JPMorgan Chase Bank assumed all of the deposits and assets of First Republic Bank. The Company held assets in First Republic Bank, however due to FDIC limits had little exposure to losses at September 30, 2023. The Company has not experienced any losses due to these bank failures.

NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2023 is not necessarily indicative of the results that may be expected through December 31, 2023.


The accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K/A filed by the Company with the SEC on April 5, 2023 (the “Form 10-K/A”).

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the future. One of the more significant accounting estimates included in these statements are the warrant liabilities and commitment fee shares liability. Such estimates may be subject to change as more current information becomes available and accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2023, and December 31, 2022.

Marketable Securities Held in Trust Account

At September 30, 2023, the investment in the Trust Account was held in a demand deposit account. At December 31, 2022, the assets held in the Trust Account were held in money market funds. All of the Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in interest income in the accompanying statements of operations. The estimated fair value of investments held in Trust Account are determined using available market information.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:


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.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet. The fair values of cash and cash equivalents, prepaid expenses, accounts payable and accrued expenses, and due to related party are estimated to approximate the carrying values as of September 30, 2023 and December 31, 2022 due to the short maturities of such instruments.

The fair value of the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrants is classified as level 3. The fair value of the commitment fee shares is based on a discounted cash flow model whereby the stock payment was discounted using risk free rates based on an estimated settlement date. The fair value of the commitment fee shares liability is classified as level 3. See Note 6 for additional information on assets and liabilities measured at fair value.
Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. At September 30, 2023, and December 31, 2022, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Ordinary Shares Subject to Possible Redemption

All of the 21,308,813 Class A ordinary shares sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a shareholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s amended and restated memorandum and articles of association. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. Therefore, all Class A ordinary shares has been classified outside of permanent equity.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable ordinary shares are affected by charges against additional paid in capital and accumulated deficit.

As of September 30, 2023, and December 31, 2022, the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
 
Class A ordinary shares subject to possible redemption December 31, 2022
 
$
216,069,362
 
Less:
       
Redemption of Class A Ordinary Shares
    (153,567,547 )
Plus:        
Remeasurement of Class A ordinary shares to redemption value     4,617,675  
Class A ordinary shares subject to possible redemption – September 30, 2023   $ 67,119,490  

Net (Loss) Income Per Ordinary Share

The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Earnings and losses are shared pro rata between the two classes of shares. The warrants are exercisable to purchase 12,210,780 Class A ordinary shares in the aggregate. As a result, diluted net (loss) income per ordinary share is the same as basic net (loss) income per ordinary share for the periods. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net (loss) income per share for each class of ordinary shares:

   
For the Three Months Ended
September 30,
 
    2023     2022
 
   
Class A
   
Class B
    Class A
    Class B
 
Basic and diluted net (loss) income per share:
                       
Numerator:
                       
Allocation of net (loss) income
 
$
(1,445,862
)
 
$
(1,229,110
)
  $ 984,021     $ 246,005  
                                 
Denominator:
                               
Weighted-average shares outstanding
   
6,266,645
     
5,327,203
      21,308,813       5,327,203  
Basic and diluted net (loss) income per share
 
$
(0.23
)
 
$
(0.23
)
  $ 0.05     $ 0.05  

   
For the Nine Months Ended
September 30,
 
    2023     2022  
   
Class A
   
Class B
    Class A
    Class B
 
Basic and diluted net (loss) income per share:
                       
Numerator:
                       
Allocation of net (loss) income
 
$
(1,720,883
)
 
$
(910,512
)
  $ 5,727,839     $ 1,431,960  
                                 
Denominator:
                               
Weighted-average shares outstanding
   
10,068,512
     
5,327,203
      21,308,813
      5,327,203
 
Basic and diluted net (loss) income per share
 
$
(0.17
)
 
$
(0.17
)
  $ 0.27     $ 0.27  


Offering Costs associated with the Initial Public Offering

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A –- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are allocated to the separable financial instruments issued in the IPO based on a relative fair value basis compared to total proceeds received. Offering costs associated with warrant liabilities is expensed, and offering costs associated with the Class A ordinary shares are charged to the shareholders’ deficit. The Company incurred offering costs amounting to $12,271,167 as a result of the IPO consisting of a $4,261,764 underwriting fee, $7,458,085 of deferred underwriting fees and $551,318 of other offering costs. The Company recorded $11,731,323 of offering costs as a reduction of equity in connection with the Class A ordinary shares included in the Units. The Company immediately expensed $539,844 of offering costs in connection with our warrants included in the units issued in our initial public offering, each whole warrant being exercisable for one Class A ordinary share at an exercise price of $11.50 per share (the “Public Warrants”) and Private Placement Warrants that were classified as liabilities.

On November 15, 2022, the Company and underwriters executed a waiver letter confirming the underwriters’ resignation and waiver of their entitlement to the payment of deferred underwriting discount under the terms of the underwriting agreement. As a result, the Company recognized $323,385 of other income attributable to the derecognition of deferred underwriting fees allocated to offering costs and $7,134,700 was recorded to additional paid-in capital in relation to the waiver of the deferred underwriting discount in the accompanying financial statements (see Note 7).

Warrant Liabilities
 
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statement of operations. The initial fair value of the Private Placement Warrants and Public Warrants were estimated using a Monte Carlo simulation (see Note 6).

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheets as current or non-current based on whether net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Standby Equity Purchase Agreement Classification.

The Company accounts for its CEF as either equity-classified or liability-classified instruments based on an assessment of the agreement’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the CEF is a freestanding financial instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the CEF meets all of the requirements for equity classification under ASC 815, including whether the CEF is indexed to the Company’s Class A ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at date of the agreement and as of each subsequent quarterly period end date while the CEF is outstanding. For an agreement that meets all of the criteria for equity classification, the CEF would be required to be recorded as a component of additional paid-in capital at the time of issuance.

For an agreement that does not meet all the criteria for equity classification, the CEF would be required to be recorded at its initial fair value on the date of issuance. The fair value of the CEF is remeasured at each balance sheet date with the change in the estimated fair value of the CEF recognized as a non-cash gain or loss on the statements of operations. The Company has analyzed the CEF (as defined in Note 1) and determined it is considered to be a freestanding instrument and does not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480. Based on the settlement terms of the agreement, the CEF met the requirements for equity classification.

Commitment Fee Shares Liability

In connection with the CEF, the Company agreed to issue Yorkville 15,000 of the Company’s ordinary shares upon consummation of the initial Business Combination. The Company recorded the fair value of the commitment fee shares liability on the balance sheets and the related expense on its statements of operations. The initial fair value of the commitment fee shares liability was estimated using a discounted cash flow model (see Note 6).

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of September 30, 2023, and December 31, 2022. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of September 30, 2023, and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.

Recent Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if converted method for all convertible instruments. ASU 2020-06 is effective January 1, 2022, and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 on January 7, 2021 (Inception). The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

In June 2016, the FASB issued ASU 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on its financial statements.
Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
NOTE 3.
INITIAL PUBLIC OFFERING

Pursuant to the IPO on March 8, 2021, the Company sold 20,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment. The warrants will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the IPO, and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation.

On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813 Units. The aggregate Public Warrants outstanding pursuant to the IPO and the underwriters partially exercised the over-allotment option are 7,102,938.

Following the closing of the IPO on March 8, 2021 and the underwriters’ partial exercise of over-allotment option on March 10, 2021, $213,088,130 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and over-allotment and the sale of the Private Placement Warrants was placed in a Trust Account, which can be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Following the Extension Meeting, the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. The funds in the Trust Account will be maintained in cash in an interest-bearing deposit account until the earlier of the Company’s Initial Business Combination or its liquidation.

Public Warrants

Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”)), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

The warrants will become exercisable on the later of one year from the closing of the IPO or 30 days after the completion of its Initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the Initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the Initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that, if the Company’s Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act, and in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.

Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):


in whole and not in part;


at a price of $0.01 per warrant;


upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and


if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

Redemption of warrants when the price per Class A ordinary share equals or exceeds $10.00.

Once the warrants become exercisable, the Company may redeem the outstanding warrants:


in whole and not in part;


at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the “fair market value” of the Company’s Class A ordinary shares except as otherwise described above;


if, and only if, the closing price of the Company’s Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and


if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants.

NOTE 4.
PRIVATE PLACEMENT

Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 4,933,333 Private Placement Warrants at a price of $1.50 per Private Placement Warrant, for an aggregate purchase price of $7,400,000, in a private placement. The proceeds from the Private Placement Warrants were added to the proceeds from the IPO held in the Trust Account.

Pursuant to the underwriters’ partial exercise of the over-allotment option on March 10, 2021, the Sponsor purchased an additional 174,509 Private Placement Warrants.

The Private Placement Warrants (including the Class A ordinary shares issuable upon exercise of the Private Placement Warrants) will not be transferable, assignable or salable until 30 days after the completion of the initial Business Combination and they will not be redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the Private Placement Warrants on a cashless basis. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the Units being sold in the IPO.

NOTE 5.
RELATED PARTY TRANSACTIONS

Founder Shares

On January 12, 2021, the Sponsor paid $25,000, or approximately $0.004 per share, to cover certain offering costs in consideration for 5,750,000 Class B ordinary shares. Up to 750,000 of the 5,327,203 Class B ordinary shares issued and outstanding (the “Founder Shares”) are subject to forfeiture by the Sponsor depending on the extent to which the underwriters’ over-allotment option is exercised. On February 23, 2021, 20,000 shares were transferred to each of the three independent directors. On March 10, 2021, the underwriters partially exercised the over-allotment option to purchase 1,308,813 Units. As a result, 422,797 Founder Shares were forfeited on April 19, 2021.

In February 2021, the Sponsor transferred its interests representing a total of 60,000 Class B ordinary shares of the Company to three independent directors of the Company for per share consideration equal to the amount paid by the Sponsor to the Company for each Founder Share. Pursuant to the terms of the agreements governing these transfers, if the transferee ceases to serve as a director of the Company prior to the completion of the Company’s Initial Business Combination, the Sponsor has the option to repurchase the Founder Shares from such transferee for the same per share consideration paid by the transferee for the initial transfer. The Sponsor’s option to repurchase the Founder Shares shall expire upon the consummation of the Company’s Initial Business Combination. The sale of the Founder Shares to the Company’s directors is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC 718, share-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of the shares sold to the Company’s directors was $300,490 or approximately $5.01 per share. The Founder Shares were effectively sold subject to a performance condition (i.e., the occurrence of an Initial Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance condition is probable of occurrence. As of September 30, 2023, the Company determined that a Business Combination is not considered probable, and, therefore,