| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
References in this Quarterly Report on Form 10-Q (the “Quarterly Report”) to “we,” “us” or the “Company” refer to DP Cap Acquisition Corp I. References
to our “management” or our “management team” refer to our officers and directors and references to the “Sponsor” refer to DP Investment Management Sponsor I LLC. The following discussion and analysis of the Company’s financial condition and
results of operations should be read in conjunction with the unaudited condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report (the “Financial Statements”). Capitalized terms used but not otherwise
defined herein have the meaning set forth in the Financial Statements. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements,
other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “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. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar
words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently
available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors sections of the Company’s Annual Report on Form 10-K/A filed with the U.S. Securities and Exchange
Commission (the “SEC”) on April 10, 2024 and this Quarterly Report. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the
Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
We are a blank check company incorporated on April 8, 2021 as a Cayman Islands exempted company and formed for the purpose of effecting a merger, share exchange, asset acquisition, share
purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”) that we have not yet identified. We are an emerging growth company and, as such, we are subject to all of the
risks associated with emerging growth companies. We completed our Public Offering on November 12, 2021. As of June 30, 2024, we had not identified any Business Combination target.
We presently have no revenue and have had no operations other than the active solicitation of a target business with which to complete a Business Combination.
We expect to continue to incur significant costs in the pursuit of our Business Combination. We cannot assure you that our plans to complete a Business Combination will be successful.
Our registration statement for our Public Offering was declared effective on November 8, 2021. On November 12, 2021, we consummated our Public Offering of 23,000,000 units (the “Units”),
which included the exercise in full of the underwriter’s option to purchase an additional 3,000,000 Units at the Public Offering price to cover over-allotments. Each Unit consists of one Class A ordinary share, par value $0.0001 per share
(the “Class A ordinary shares”), and one-half of one redeemable warrant (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A ordinary share at an exercise price of $11.50 per share, subject
to adjustment. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $230.0 million.
Simultaneously with the closing of the Public Offering, we consummated the private sale (the “Private Placement”) of 4,733,333 warrants (the “Private Placement Warrants”) to DP Investment
Management Sponsor I LLC (the “Sponsor”), each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.50 per Private Placement Warrant, generating total gross proceeds of $7.1 million.
Simultaneously with the closing of the Public Offering, pursuant to the Sponsor’s promissory note (the “Sponsor Note”), the Sponsor loaned $4,600,000 to the Company (the “Sponsor Loan”).
The Sponsor Loan is interest free. The Sponsor Loan shall be repaid or converted into warrants (the “Sponsor Loan Warrants”) at a purchase price of $1.50 per Sponsor Loan Warrant, at the Sponsor’s discretion and at any time until the
consummation of our initial Business Combination. Any Sponsor Loan Warrants issued will be identical to the Private Placement Warrants.
Upon the closing of our Public Offering, a total of $234.6 million ($10.20 per unit), comprised of $225.4 million of the proceeds from the Public Offering (which amount includes $8.05
million of the underwriter’s deferred discount), $4.6 million of the proceeds of the sale of the Private Placement Warrants and $4.6 million of the proceeds from the Sponsor Loan, were placed in a U.S.- based trust account (“Trust Account”)
maintained by Continental Stock Transfer & Trust Company acting as trustee. The funds held in the Trust Account may be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund selected by us meeting the conditions of Rule 2a-7 of the
Investment Company Act, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
Our management has broad discretion with respect to the specific application of the net proceeds of our Public Offering and the sale of the Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that we will be able to complete a Business Combination successfully.
We must complete one or more Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to
management for working capital purposes, if permitted, and excluding the amount of deferred underwriting discounts held in trust) at the time of our signing a definitive agreement in connection with our Business Combination. However, we
only intend to complete a Business Combination if the post-transaction company owns or acquires 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.
If we are unable to complete a Business Combination by November 12, 2024, and our shareholders have not amended our third amended and restated memorandum and articles of association (the
“Third A&R M&A”) to extend the combination period, we will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully
available funds therefor, 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 (if any) (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then outstanding Public Shares, which redemption will completely extinguish public shareholders’
rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining
shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
On May 5, 2023, certain of our unaffiliated investors (the “Investors”) entered into non-redemption agreements (“Non-Redemption Agreements”) with the Sponsor, pursuant to which the
Investors agreed to (i) not redeem an aggregate of up to 4,000,000 previously-held Class A ordinary shares (the “Investor Shares”) in connection with the First Extension (as defined below) and (ii) vote the Investor Shares in favor of the
First Extension. In exchange for these commitments from the Investors, the Sponsor has agreed to transfer to the Investors (i) an aggregate of up to 1,000,000 Class B ordinary shares in connection with an extension until November 12, 2023
and (ii) to the extent our board of directors agrees to further extend the date up to three times by an additional month each time until February 12, 2024 to consummate its Business Combination, an aggregate of up to 1,500,000 Class B
ordinary shares, which includes the Class B ordinary shares referred to in clause (i), in each case, on or promptly after the consummation of the Business Combination.
On May 10, 2023, we held an extraordinary general meeting of shareholders (the “First Extraordinary General Meeting”) at which our shareholders voted to approve to amend and restate our
amended and restated memorandum and articles of association to extend the date (the “Extension Date”) by which we must (1) consummate our Business Combination, (2) cease our operations except for the purpose of winding up if we fail to
complete such Business Combination, and (3) redeem all of the Class A ordinary shares included as part of the Units sold in the Public Offering, from May 12, 2023 to November 12, 2023, with optional additional extensions of up to three
times by an additional month each time, at the option of our board of directors, until February 12, 2024 (the “First Extension”).
In connection with the First Extension, shareholders holding 18,940,598 Class A ordinary shares issued in our Public Offering exercised their right to redeem such shares at a per share
redemption price of $10.51. As a result, approximately $199.0 million was removed from our Trust Account to pay such holders. Following these redemptions, we had 4,059,402 Class A ordinary shares with redemption rights outstanding.
On November 8, 2023, our board of directors approved the extension of the date by which we are required to complete our Business Combination until December 12, 2023. On December 8, 2023,
our board of directors approved the extension of the date by which we are required to complete our Business Combination until January 12, 2024. On January 8, 2024, our board of directors approved the extension of the date by which we are
required to complete our Business Combination until February 12, 2024.
On February 8, 2024, we held a second extraordinary general meeting of shareholders (“Second Extraordinary General Meeting”) at which our shareholders approved, by special resolution, a
proposal to amend and restate the Company’s second amended and restated memorandum and articles of association to extend the Extension Date from February 12, 2024 to November 12, 2024 (the “Second Extension”). In connection with the Second
Extension, the holders of an additional 2,559,402 Class A ordinary shares properly exercised their right to redeem their Class A ordinary shares for cash at a redemption price of approximately $10.96 per share. As a result, an aggregate of
approximately $28 million was removed from our Trust Account to pay such holders. Following these redemptions, we had 1,500,000 Class A ordinary shares with redemption rights outstanding and approximately $16.4 million in our Trust Account.
In connection with the approval of the Second Extension, the Sponsor has agreed to deposit on a monthly basis, or pro rata portion thereof if less than a month,
$49,500 into our Trust Account for the benefit of our public shareholders (the “Extension Deposit”), until the earlier of (i) the date of the extraordinary general meeting held in connection with the shareholder vote to approve a Business
Combination and (ii) November 12, 2024 (or any earlier date of termination, dissolution or winding up of the Company as determined in the sole discretion of our board of directors). As of June 30, 2024, the Sponsor deposited an aggregate of
$247,500 into its Trust Account as Extension Deposits from February 13, 2024 through June 30, 2024. On July 11, 2024 and August 9, 2024, the Company made a combined deposit of $99,000 into the Trust Account representing extension deposits
for July and August, 2024.
Pursuant to the terms of the third amended and restated memorandum and articles of association, on February 9, 2024, the Initial Shareholders elected to convert an aggregate of 5,749,997
Founder Shares on a one-for-one basis into Class A ordinary shares (such shares, the “Converted Shares”). The Initial Shareholders will not have any redemption rights or be entitled to liquidating distributions from the Trust Account in
connection with the Converted Shares if we fail to consummate a Business Combination, and the Converted Shares will be subject to the restrictions on transfer included in the letter agreement entered into by and between the Initial
Shareholders and us in connection with our Public Offering. Following such conversion, and as a result of the redemptions described above, as of March 15, 2024, we had an aggregate of 7,249,997 Class A ordinary shares issued and
outstanding, of which 1,500,000 Class A ordinary shares issued and outstanding are with redemption rights, and three Founder Shares issued and outstanding.
Application for Transfer to The Nasdaq Capital Market
On August 21, 2023, we received a letter from the Listing Qualifications staff (the “Nasdaq Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we were not in compliance
with Nasdaq Listing Rule 5450(b)(2)(A), which requires that our listed securities maintain a minimum Market Value of Listed Securities (“MVLS”) of $50 million (the “MVLS Rule”). Subsequently on March 11, 2024, the Nasdaq Staff notified us
that we have regained compliance with the MVLS Rule. On October 12, 2023, we received a second letter from the Nasdaq Staff notifying us that we were not in compliance with Nasdaq Listing Rule 5450(a)(2), which requires that we maintain a
minimum of 400 total holders for continued listing on the Nasdaq Global Market (the “Minimum Total Holders Rule”). To resolve the deficiencies and regain compliance with the Nasdaq continued listing requirements, the Company submitted an
application to Nasdaq for a transfer from The Nasdaq Global Market to The Nasdaq Capital Market on January 24, 2024, which was approved by the Nasdaq on March 26, 2024. On April 4, 2024, the Company’s Units, Class A Ordinary Shares and
Public Warrants transferred from The Nasdaq Global Market to The Nasdaq Capital Market, which was approved by the Nasdaq on March 26, 2024.
Results of Operations
For the three and six months ended June 30, 2024, we had a net loss of $(35,334) and $(273,983), respectively, which consisted of earnings on cash (investments) held in trust of $180,193
and $507,455, respectively, offset by general and administrative costs of $215,527 and $781,438, respectively.
For the three and six months ended June 30, 2023, we had net income of $1,074,593 and $3,242,422, respectively, which consisted of earnings on cash (investments) held in trust of
$1,690,637 and $4,215,754, respectively, partially offset by general and administrative costs of $616,044 and $973,332, respectively.
All activity from April 8, 2021 (inception) through June 30, 2024, relates to our formation and our Public Offering and subsequent to our Public Offering, the search for a target for our
Business Combination. We will not generate any operating revenues until after the completion of our Business Combination, at the earliest.
Liquidity and Capital Resources
The registration statement for our Public Offering was declared effective by the SEC on November 8, 2021. On November 12, 2021, we consummated our Public Offering of 23,000,000 Units,
inclusive of the underwriters’ election to exercise their option to purchase an additional 3,000,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of the Public Offering, we
consummated the sale of 4,733,333 Private Placement Warrants to our Sponsor at a price of $1.50 per warrant, generating gross proceeds of $7,100,000. On the Close Date, our Sponsor loaned us $4,600,000 under the Sponsor Loan.
Following the Public Offering, the sale of the Private Placement Warrants and the issuance of the proceeds under the Sponsor Loan, a total of $234,600,000 was placed in the Trust Account,
which consisted of $225,400,000 from the proceeds from the Public Offering, $4,600,000 from the proceeds of the sale of the Private Placement Warrants and $4,600,000 from the proceeds from the Sponsor Loan. We incurred $13,148,152 in
transaction costs, including $4,600,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $498,152 of other costs.
Our liquidity needs up to June 30, 2024 had been satisfied through (i) a payment from the Sponsor along with certain funds controlled by Data Point Capital of $25,000 to cover certain
offering and formation costs in exchange for the issuance of the Founder Shares to the Sponsor and (ii) the receipt of loans to us of up to $300,000 by the Sponsor under an unsecured promissory note. The unsecured promissory note was
non-interest bearing and was due at the earlier of December 31, 2021 and the closing of the Public Offering. As of June 30, 2024, no amounts were outstanding under the unsecured promissory note. In addition, in order to finance transaction
costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may, but are not obligated to, provide us working capital loans. In the period ended June 30, 2024, related
parties have advanced an aggregate of $786,616 in capital contributions to the Company for the purpose of funding extension deposits and other working capital needs; however, the Company may still need additional capital to fund its working
capital needs and search for a target. As of June 30, 2024, and through the date of this filling, there were no amounts outstanding under any working capital loans.
For the six months ended June 30, 2024, net cash used in operating activities was $576,232, consisting of net loss of $(273,983), earnings on cash held in Trust Account of $507,455 and
changes in operating assets and liabilities of $205,206, resulting primarily from increases in accounts payable and accrued expenses.
For the six months ended June 30, 2023, net cash used in operating activities was $252,121, consisting of net income of $3,242,422, earnings on investments held in Trust Account of
$4,215,754 and changes in operating assets and liabilities of $721,211, resulting primarily from increases in accounts payable and accrued expenses.
As of June 30, 2024, we had cash held in the Trust Account of $16,986,054. As of December 31, 2023, we have investments held in Trust Account of $44,290,118. At the Second Extraordinary
General Meeting held on February 8, 2024, in connection with the Second Extension, holders of an additional 2,559,402 Class A ordinary shares properly exercised their right to redeem their Class A ordinary shares for cash at a redemption
price of approximately $10.96 per share. As a result, an aggregate of approximately $28 million was removed from our Trust Account to pay such holders. We may withdraw interest earned to pay our income taxes, if any. We intend to use
substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our
Business Combination. To the extent that our share capital is used, in whole or in part, as consideration to complete a Business Combination, the remaining proceeds held in the Trust Account 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 June 30, 2024 and December 31, 2023, we had cash of $372,527 and $409,643, respectively, held outside of the Trust Account. We intend to use the funds held outside the Trust Account
primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or
owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination, and to pay our other operating expenses. In the period ended June 30, 2024, related
parties have advanced an aggregate of $786,616 in capital contributions to the Company. The Company utilized $297,000 of this contribution to fund extension deposits paid into the Trust Account and the remainder is available to the Company
for working capital needs.
In order to fund working capital deficiencies or finance transaction costs in connection with a 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 a Business Combination, we would repay such loaned amounts or, in the case of Working Capital Loans, such loans may be converted into warrants of
the Company at the option of the lender. In the event that a Business Combination does not close, we may use a portion of the cash held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be
used for such repayment.
We believe we will need to raise additional funds in order to meet the expenditures required for operating our business. Additionally, if our estimate of the costs of identifying a target
business, undertaking in-depth due diligence and negotiating a 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 Business Combination.
Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our then outstanding public shares upon completion of our Business
Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.
At June 30, 2024 and December 31, 2023, other than the $4,600,000 Sponsor Loan, we did not have other long-term debt, capital lease obligations, operating lease obligations or long-term
liabilities.
Going Concern Considerations
We have until November 12, 2024 to consummate a Business Combination. It is currently uncertain that we will be able to consummate a Business Combination by this time. If our Business
Combination cannot be completed prior to November 12, 2024, we will cease operations except for the purpose of winding-up, redeem our outstanding public shares, and liquidate and dissolve unless, prior to such date, the Company receives an
extension approval from its shareholders and elects to further extend the date on which a Business Combination must be consummated.
As of June 30, 2024, we had $372,527 in cash outside of the Trust Account for our working capital needs and a working capital deficit of $935,141. We expect to incur significant costs in
pursuit of our acquisition plans and the net proceeds of the Public Offering, the sale of the Private Placement Warrants and the Sponsor Loan not being held in the Trust Account are insufficient to allow us to operate until November 12,
2024. The Company will likely depend on loans and or capital contributions from our Sponsor, its affiliates or members of the management team and/or third parties to fund our search and to complete a Business Combination. Further, if our
estimates of the costs of undertaking in-depth due diligence and negotiating the Business Combination is less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to a Business
Combination. We are required to deposit $49,500 into the Trust Account each month to extend the Company’s liquidation date through November 12, 2024. The Company has paid extension deposits through August 2024. The Sponsor is not under any
obligation to advance additional funds to, or to invest in, us. If we are unable to raise additional funds, we 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 our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all.
We continue our search for a target and will continue pursuing all options to complete a Business Combination by November 12, 2024. It is uncertain whether we will be able to consummate a
Business Combination by November 12, 2024 or whether the current funds that we have will be sufficient to consummate a Business Combination. If a Business Combination is not consummated by November 12, 2024, we will cease operations except
for the purpose of winding up, redeem the then outstanding Public Shares, and liquidate and dissolve unless, prior to such date, we receive an extension approval from our shareholders and elect to extend the date on which a Business
Combination must be consummated. These factors, among others, raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this Quarterly Report. These unaudited condensed financial
statements do not include any adjustment that might be necessary if we are unable to continue as a going concern.
Commitments and Contingencies
Registration Rights
The holders of Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of working capital loans (and any Class A ordinary shares issuable upon the
exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the working capital loans) are entitled to registration rights pursuant to a registration rights agreement. The holders of these securities are
entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our
completion of our Business Combination. However, the registration rights agreement provides that we will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lockup
period, which occurs (i) in the case of the Founder Shares, until the earliest of (A) one year after the completion of our Business Combination and (B) subsequent to our Business Combination, (x) if the closing price of our Class A ordinary
shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 120 days
after our Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of our public shareholders having the right to exchange their ordinary shares for
cash, securities or other property, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares underlying such warrants, 30 days after the completion of our Business Combination. We will bear the
expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
We granted the underwriter a 45-day option from the date of the Public Offering to purchase on a pro rata basis up to 3,000,000 additional Units to cover over-allotments, if any, at the
Public Offering price, less the underwriting discounts and commissions. The over-allotment option was exercised in full on November 12, 2021.
The underwriter was entitled to an underwriting discount of $0.20 per Unit, or $4.6 million in the aggregate, paid upon the closing of the Public Offering. An additional fee of $0.35 per
Unit, or $8.05 million in the aggregate will be payable to the underwriter for deferred underwriting commissions. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we
complete a Business Combination, subject to the terms of the underwriting agreement.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our Financial Statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation of our Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure
of contingent assets and liabilities in our 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
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. Refer to our Annual Report on Form 10-K/A for the year ended December 31, 2023 filed on April 10, 2024 for our critical
accounting policies and estimates. There have been no changes in these policies since the filing of this Form 10-K/A.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” and under the
JOBS Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a
result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, the Financial Statements may not be comparable to
companies that comply with new or revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in
the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting
pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the
financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s
compensation to median employee compensation. These exemptions will apply for a period of five years from the completion of our Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
|
ITEM 4.
|
CONTROLS AND PROCEDURES.
|
Evaluation of Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive officer and
principal financial and accounting officer to allow timely decisions regarding required disclosure.
As required by Rule 13a-15 and 15d-15 under the Exchange Act, our principal executive officer and principal financial and accounting officer carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter ended June 30, 2024, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Due to identified material
weaknesses in our internal control over financial reporting identified in current and previous reporting periods, as described below, our principal executive officer and principal financial and accounting officer concluded that our
disclosure controls and procedures were not effective as of June 30, 2024.
Notwithstanding the conclusion by our principal executive officer and principal financial officer that our disclosure controls and procedures as of June 30, 2024 were not effective, and
notwithstanding the material weaknesses in our internal control over financial reporting described below, management believes that the unaudited condensed financial statements and related financial information included in this Quarterly
Report fairly present in all material respects our financial condition, results of operations and cash flows as of the dates presented, and for the periods ended on such dates, in conformity with GAAP.
Material Weakness
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of
the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our Annual Report for the year ended December 31, 2023 as filed with the SEC on April 10, 2024, management
identified a deficiency in internal control over financial reporting related to the accounting for complex financial instruments and the review and approval of adjusting journal entries. As of June 30, 2024, the identified material
weaknesses in our internal controls over financial reporting have not yet been remediated.
Remediation Plan
Management plans to remediate the material weaknesses by 1) incorporating additional controls and procedures over the review of complex financial instrument valuations, 2) increasing
communication among our personnel and third-party professionals with whom we consult regarding accounting applications and 3) incorporating additional procedures over the review of the general ledger and the review and approval of
adjustment to journal entries. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II
—OTHER INFORMATION
| ITEM 1. |
LEGAL PROCEEDINGS.
|
None.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in the “Risk Factors” sections of our Annual Report on Form
10-K/A filed with the SEC on April 10, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. We may disclose changes to such factors or disclose additional
factors from time to time in our future filings with the SEC.
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
Unregistered Sales
None.
Use of Proceeds
On November 8, 2021, our registration statement on Form S-1 (File No. 333-260456) was declared effective by the SEC for the Public Offering pursuant to which we sold an aggregate of 23,000,000
Units, inclusive of the underwriters’ election to exercise their option to purchase an additional 3,000,000 Units, at an offering price to the public of $10.00 per Unit for an aggregate offering price of $230,000,000, with each Unit
consisting of one Class A ordinary share of the Company at $0.0001 par value and one-half of one warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share.
Net proceeds of $230,000,000 from the Public Offering and the sale of the Private Placement Warrants, including deferred underwriting discounts of $8,050,000, were deposited into the
Trust Account on the Close Date and $4,600,000 of the proceeds from the sale of the Private Placement Warrants was deposited in our operating account for future working capital expenditures. We paid $4,600,000 in underwriting discounts and
incurred offering costs of $498,152 related to the Public Offering. In addition, the Underwriters agreed to defer $8,050,000 in underwriting discounts, which amount will be payable when and if a business combination is consummated. No
payments were made by us to directors, officers or persons owning ten percent or more of our Class A ordinary shares or to their associates, or to our affiliates.
In connection with the First Extension adopted at the First Extraordinary General Meeting held on May 10, 2023, we paid approximately $199.0 million in redemption proceeds to shareholders
holding 18,940,598 Class A ordinary shares who exercised their right to redeem such shares at a per share redemption price of $10.51.
In connection with the Second Extension adopted at the Second Extraordinary General Meeting held on February 8, 2024, we paid approximately $28 million in redemption proceeds to shareholders
holding 2,559,402 Class A ordinary shares who exercised their right to redeem such shares at a per share redemption price of $10.96.
Other than as described above, there has been no material change in the planned use of proceeds from the Public Offering as described in our final Prospectus, dated November 8, 2021, which was
filed with the SEC on November 10, 2021.
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES.
|
None.
| ITEM 4. |
MINE SAFETY DISCLOSURES.
|
Not applicable.
| ITEM 5. |
OTHER INFORMATION.
|
|
No.
|
|
Description of Exhibit
|
|
|
|
Third Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 filed with the Company’s Current Report on Form 8-K filed with the SEC on February 12, 2024 (File
No. 001-41041))
|
| |
|
|
|
|
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
| |
|
|
|
|
|
Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
| |
|
|
|
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
| |
|
|
|
|
|
Certification of Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
| |
|
|
|
101.INS*
|
|
Inline XBRL Instance Document
|
| |
|
|
|
101.CAL*
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
| |
|
|
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
| |
|
|
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
| |
|
|
|
101.LAB*
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
| |
|
|
|
101.PRE*
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
| |
|
|
|
104*
|
|
Cover Page Interactive Data File
|
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
|
DP CAP ACQUISITION CORP I
|
| |
|
|
|
Date: August 14, 2024
|
By:
|
/s/ Scott Savitz
|
| |
Name:
|
Scott Savitz
|
| |
Title:
|
Chief Executive Officer and Chairman
|
| |
|
|
| |
By:
|
/s/ Bruce Revzin
|
|
Date: August 14, 2024
|
Name:
|
Bruce Revzin
|
| |
Title:
|
Chief Financial Officer
|
| |
|
(Principal Accounting and Financial Officer)
|
33
