NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 - Description of Organization, Business
Operations and Going Concern
Quadro Acquisition One Corp. (the “Company”,
formerly known as Kismet Acquisition Two Corp.) is a blank check company incorporated as a Cayman Islands exempted company on September
15, 2020. The Company was incorporated for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation,
contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial business
combination with one or more businesses or entities that the Company has not yet identified (“Business Combination”).
As of March 31, 2023, the Company had not yet
commenced operations. All activity for the period from September 15, 2020 (inception) through March 31, 2023, relates to the Company’s
formation and the initial public offering (the “Initial Public Offering” or “IPO”), which is described below,
and since the Initial Public Offering, the search for a potential target. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest
income on investments held in Trust Account (as defined below) from the proceeds derived from the Initial Public Offering and the sale
of the Private Placement Warrants (as defined below).
The Company’s sponsor was Kismet Sponsor
Limited, a British Virgin Islands company (the “Prior Sponsor”). The Registration Statement for the Initial Public Offering
on Form S-1 initially filed with the U.S. Securities and Exchange Commission (“SEC”) on January 26, 2021, as amended (File
No. 333- 252419), was declared effective on February 17, 2021 (the “Registration Statement”). On February 22, 2021, the Company
consummated its Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A Ordinary
shares included in the Units sold, the “Public Shares”), including 3,000,000 additional Units to cover over-allotments
(the “Over-Allotment Units”), at $10.00 per Unit, generating gross proceeds of $230.0 million, and incurring offering
costs of approximately $13.1 million, of which approximately $8.1 million was for deferred underwriting commissions (see Note
6).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 4,400,000 warrants (each,
a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per
Private Placement Warrant with the Prior Sponsor, generating gross proceeds of $6.6 million, and incurring offering costs of approximately
$7,000 (see Note 4).
On June 15, 2022, the Prior Sponsor transferred 6,250,000 Class
B ordinary shares and 4,400,000 Private Placement Warrants held by the Prior Sponsor to Quadro Sponsor LLC, a Delaware limited
liability company and wholly owned subsidiary of the Prior Sponsor (the “New Sponsor” or “Sponsor”). On June 30,
2022, the Prior Sponsor transferred all the membership interests of the New Sponsor to Quadro IH DMCC (“Quadro”), a company
registered in Dubai Multi Commodities Centre in the United Arab Emirates (the “Sponsor Transaction”). In connection with the
Sponsor Transaction, the Prior Sponsor also assigned to the New Sponsor all of its rights and obligations under the (i) Letter Agreement,
dated as of February 17, 2021, (ii) Registration Rights Agreement (as defined in Note 5) and (iii) Promissory Note (as defined below).
In addition, the Company and Kismet Capital Group LLC (“Kismet LLC”) mutually terminated the Administrative Services Agreement,
dated February 17, 2021 (the “Administrative Services Agreement”). As a result, the Company is no longer obligated to pay
a $10,000 monthly fee to Kismet LLC pursuant to the Administrative Services Agreement.
Upon the closing of the Initial Public Offering
and the Private Placement, $230.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of
the proceeds of the Private Placement were placed in a trust account (“Trust Account”) with Continental Stock Transfer &
Trust Company (“Continental”) acting as trustee and invested in U.S. government treasury obligations 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 (the “Investment
Company Act”), which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier
of (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s
initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80%
of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable, if any, on the income
accrued on the Trust Account) at the time the Company signs a definitive agreement in connection with the initial Business Combination.
However, the Company will only 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.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company will provide its holders of the Public
Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for
a pro rata portion of the amount then in the Trust Account (initially at $10.00 per share, plus any pro rata interest earned on the
funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed
to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay
to the underwriters (see Note 6). These Public Shares were recorded at a redemption value and classified as temporary equity upon the
completion of the Initial Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”). In
such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon
such consummation of a Business Combination and a majority of the shares are voted in favor of the Business Combination. If a shareholder
vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company
will, pursuant to the amended and restated memorandum and articles of association which were adopted by the Company upon the consummation
of the Initial Public Offering (the “Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender
offer rules of the SEC, and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder
approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons,
the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender
offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for or against
the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holder of the Founder
Shares (as defined in Note 5) prior to the Initial Public Offering (the “Initial Shareholder”) agreed to vote its Founder
Shares and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In addition, the
Initial Shareholder agreed to waive its redemption rights with respect to their Founder Shares and Public Shares in connection with the
completion of a Business Combination.
Notwithstanding the foregoing, the Memorandum
and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with
whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate
of 20% or more of the Class A Ordinary shares sold in the Initial Public Offering, without the prior consent of the Company.
The Company’s Sponsor, executive officers,
directors and director nominees agreed not to propose an amendment to the Memorandum and Articles of Association that would affect the
substance or timing of the Company’s obligation to provide for the redemption of its Public Shares in connection with a Business
Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides
the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.
The Company initially had until February 22, 2023
(the “Original Termination Date”) to complete the initial Business Combination. On February 20, 2023, the Company held the
2023 Extraordinary General Meeting at which the shareholders of the Company approved to extend the date by which the Company must consummate
an initial Business Combination to April 22, 2023 and to allow the Company’s board, without another shareholder vote, to extend
Combination Date on a monthly basis up to seven times for an additional one month each time until November 22, 2023, or a total of up
to nine months after the Original Termination Date (the “Extension”).
In connection with the Extension, the Sponsor
or its designees contributed to the Company as a loan the initial contribution of $120,000 (the “Initial Extension Loan”)
in February 2023 for the portion of the extension ending on April 22, 2023. The Sponsor will also loan the company extension contributions
of $60,000 per month for each subsequent calendar month (commencing on April 22, 2023 and on the 22nd day of each subsequent month) until
November 22, 2023, or portion thereof, that is needed to complete an initial Business Combination, which amount will be deposited into
the Trust Account (together with the Initial Extension Loan, the “Extension Loans”).
In connection with the Extension, shareholders
holding 20,451,847 Class A ordinary shares exercised their right to redeem those shares for cash at an approximate price of
$10.20 per share for an aggregate of approximately $208.5 million.
On January 31, 2023, the Company issued an aggregate
of 6,250,000 Class A ordinary shares to the Sponsor, upon the conversion of an equal number of Class B ordinary shares held by the Sponsor
(the “Conversion”). The 6,250,000 Class A ordinary shares issued in connection with the Conversion are subject to the same
restrictions as applied to the Class B ordinary shares before the Conversion, including, among others, certain transfer restrictions,
waiver of redemption rights and the obligation to vote in favor of an initial Business Combination as described in the prospectus for
the Company’s initial public offering. Following the Conversion, there are 29,250,000 Class A ordinary shares issued and outstanding
and no Class B ordinary shares issued and outstanding. As a result of the Conversion, the Sponsor held 21.4% of the outstanding Class
A ordinary shares.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
On February 10, 2023, the Company instructed Continental
to liquidate the investments held in the Trust Account and instead to hold the funds in the Trust Account in an interest-bearing
demand deposit account at Morgan Stanley, with Continental continuing to act as trustee, until the earlier of the consummation of the
Company’s initial Business Combination or the Company’s liquidation. As a result, following the liquidation of investments in
the Trust Account, the remaining proceeds from the Initial Public Offering and Private Placement are no longer invested in U.S. government
securities or money market funds.
If the Company is unable to complete a Business Combination by June
22, 2023 (or November 22, 2023 if the Company fully extends the time to complete a Business Combination, 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 all Public Shares then outstanding at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including any amounts representing interest earned on the Trust Account, less any interest
released to the Company for the payment of taxes, if any (and less up to $100,000 in interest reserved for expenses in connection
with the Company’s dissolution), 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 remaining shareholders and the Company’s
board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law.
In connection with the redemption of 100%
of the Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full
pro rata portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and
not previously released to the Company to pay the Company’s taxes payable (less up to $100,000 of interest to pay dissolution
expenses).
The Initial Shareholder agreed to waive its liquidation
rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However,
if the Initial Shareholder should acquire Public Shares in or after the Initial Public Offering, it will be entitled to liquidating distributions
from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination
Period. The underwriters agreed to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account
in the event the Company does not complete a Business Combination within the Combination Period, and, in such event, such amounts will
be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event
of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust
Account assets) will be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account,
the Sponsor 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, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality
or other similar agreement or business combination agreement, reduce the amount of funds 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, less taxes payable, provided that such
liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to
the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against
a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to
reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors,
service providers (except the Company’s independent registered public accounting firm), prospective target businesses or other entities
with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or
to monies held in the Trust Account.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Liquidity and Going Concern
As of March 31, 2023, the Company had approximately
$950 in its operating bank account and working capital deficit of approximately $1.1 million.
The Company’s liquidity needs to date have
been satisfied through a contribution of $25,000 from the Prior Sponsor to cover certain expenses in exchange for the issuance of
the Founder Shares, a loan of approximately $111,000 from the Prior Sponsor pursuant to the IPO Note (as defined in Note 5), and
a portion of the proceeds from the consummation of the Private Placement not held in the Trust Account. The Company repaid the IPO Note
in full on February 24, 2021. 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 the Company’s officers and directors may, but are not obligated to, provide the Company
Working Capital Loans (as defined in Note 5). As of March 31, 2023 and December 31, 2022, there were no amounts outstanding under any
Working Capital Loans.
On April 13, 2022, the Company issued an unsecured promissory note
in the amount of up to $200,000 to the Prior Sponsor (the “Promissory Note”). On May 25, 2022, the Company and the Prior
Sponsor amended the Promissory Note agreement and increased the principal amount to $400,000. The Promissory Note bears no interest and
is due and payable within one year from the date of the first drawdown of the amended and restated note, or June 7, 2023. On June 30,
2022, the Prior Sponsor assigned all of its rights and obligations under the Promissory Note to the New Sponsor in connection with the
Sponsor Transaction. As of March 31, 2023, the Company has fully drawn $400,000 under the Promissory Note. As of March 31, 2023 and
December 31, 2022, approximately $400,000 and $319,000 were outstanding under the Promissory Note, respectively.
The Company may need to raise additional capital
through loans or additional investments from its Sponsor, its officers or directors or their affiliates. The Company’s officers,
directors and Sponsor, or their affiliates, 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, reducing overhead expenses, and extending the terms and due dates of certain accrued expenses and other liabilities.
The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. In connection
with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial
Statements - Going Concern” (“ASC 205-40”), management has determined that the liquidity condition, mandatory liquidation
and subsequent dissolution raises substantial doubt about the Company’s ability to continue as a going concern. Management continues
to seek to complete a Business Combination prior to the mandatory liquidation date. No adjustments have been made to the carrying amounts
of assets or liabilities should the Company be required to liquidate after June 22, 2023. The accompanying financial statements do not
include any adjustment that might be necessary if the Company is unable to continue as a going concern.
Note 2 - Basis of Presentation and 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, certain disclosures included in the annual
financial statements have been condensed or omitted from the accompanying unaudited condensed financial statements as they are not required
for interim financial statements under GAAP and the rules of the SEC. In the opinion of management, the accompanying 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 months ended March 31, 2023 are not necessarily indicative
of the results that may be expected through December 31, 2023 or any future period.
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 for the fiscal year ended December 31, 2022, as filed by the Company with the SEC on April 18, 2023 (the “2022 Annual Report”).
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging
growth 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 an 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 accompanying unaudited condensed financial statements with another public company that is neither an emerging
growth company nor an emerging growth company that 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 accompanying unaudited
condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed 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 accompanying unaudited condensed financial statements, which management considered in formulating its
estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates
included in the accompanying unaudited condensed financial statements is the determination of the fair value of the derivative liabilities. Accordingly, the actual results could differ 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 had no cash equivalents as of March
31, 2023 and December 31, 2022.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, regularly exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant
adverse impact on the Company's financial condition, results of operations, and cash flows.
Cash and investments Held in the Trust
Account
The Company
classifies its U.S. Treasury and equivalent securities as held to maturity in accordance with FASB Accounting Standard Codification (“ASC”)
Topic 320, “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company
has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost on the accompanying
consolidated balance sheets and adjusted for the amortization or accretion of premiums or discounts.
At March 31, 2023, substantially
all of the assets held in the Trust Account were held in cash. At December 31, 2022, substantially all of the assets held in the Trust
Account were held in money market funds which invest primarily in U.S. Treasury securities. The money market funds are presented at fair
value within the accompanying consolidated balance sheets, and fair value of the investments in the Trust Account is equal to the amortized
cost basis of the money market funds.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate
the carrying amounts represented in the condensed balance sheets.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 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 consist of:
| ● | 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.
Derivative Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to
ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities
or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its warrants issued
in connection with its Initial Public Offering and Private Placement and units that may be issued in connection with a forward
purchase agreement (the “Forward Purchase Units”) as derivative liabilities in accordance with ASC 815-40. Accordingly,
the Company recognizes the instruments as liabilities at fair value and adjusts the instruments to fair value at the end of each
reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair
value of derivative liabilities is recognized in the Company’s unaudited condensed statements of operations. The
fair value of warrants issued in connection with the Initial Public Offering was initially measured using Monte-Carlo simulation and
has subsequently been measured on the market price of such warrants at each measurement date when separately listed and traded. The
fair value of warrants issued in connection with the Private Placement was initially measured using Black-Scholes Option Pricing
Model and subsequently using the market value of the public warrants. The fair value of the Forward Purchase Units has been measured
using the John C Hull’s Options, Futures and Other Derivatives model at each measurement date.
Offering Costs Associated with the Initial
Public Offering
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering.
Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value
basis, compared to total proceeds received. Offering costs associated with derivative liabilities are expensed as incurred, presented
as non-operating expenses in the statements of operations in the period that the costs occurred. Offering costs associated with the Class
A ordinary shares were charged against the carrying value of the Class A ordinary shares upon the completion of the Initial Public Offering.
The Company classifies deferred underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to
require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible
Redemption
The Company accounts for its Class A ordinary shares subject to possible
redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Class A ordinary shares
subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable
Class A ordinary shares (including Class A ordinary shares that feature redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary
equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary
shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence
of uncertain future events. Accordingly, as of March 31, 2023 and December 31, 2022, 2,548,153 and 23,000,000 Class A Ordinary Shares
subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the accompanying
condensed balance sheets, respectively.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption
value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date
for the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value
to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Share-Based Compensation
The Company complies with the accounting and disclosure requirement
of ASC Topic 718, “Compensation – Stock Compensation.” Share-based compensation to employees and non-employees is recognized
over the requisite service period based on the estimated grant-date fair value of the awards. Share-based awards with graded-vesting schedules
are recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The Company
recognizes the expense for share-based compensation awards subject to performance-based milestone vesting over the remaining service period
when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based
milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. Share-based compensation
will be recognized in general and administrative expense in the statements of operations. The Company issued option awards that contain
both a performance condition and service condition. The option awards vest upon the consummation of the initial Business Combination and
will expire in five years after the date on which they first become exercisable. The Company has determined that the consummation of an
initial Business Combination is a performance condition subject to significant uncertainty. As such, the achievement of the performance
is not deemed to be probable of achievement until the consummation of the event, and therefore no compensation has been recognized for
the period from inception to March 31, 2023.
Income Taxes
FASB ASC Topic 740, “Income Taxes,”
prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. The Company’s management determined 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. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023 and December 31,
2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation
from its position.
There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the
Company. Consequently, income taxes are not reflected in the accompanying unaudited condensed financial statements. The Company’s
management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income per Ordinary Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has two classes of shares, which are referred to as
Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income
(loss) per ordinary share is calculated by dividing the net income by the weighted average number of ordinary shares outstanding for the
respective period.
The calculation of diluted net Income per ordinary share does not consider
the effect of the warrants underlying the Units sold in the Initial Public Offering and the Private Placement Warrants to purchase an
aggregate of 12,066,667 Class A ordinary shares since their exercise is contingent upon future events. As a result, diluted net income
per share is the same as basic net income per share for the three months ended March 31, 2023 and 2022. Accretion associated with the
redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The table below presents a reconciliation of the
numerator and denominator used to compute basic and diluted net income per share for each class of Ordinary Shares:
| |
For the Three Months Ended March 31, | |
| |
2023 | | |
2022 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income | |
$ | 547,704 | | |
$ | 62,673 | | |
$ | 3,208,772 | | |
$ | 871,949 | |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Weighted average ordinary shares outstanding, basic and diluted | |
| 18,411,009 | | |
| 2,106,742 | | |
| 23,000,000 | | |
| 6,250,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income per ordinary share | |
$ | 0.03 | | |
$ | 0.03 | | |
$ | 0.14 | | |
$ | 0.14 | |
Recent Accounting Pronouncements
The Company’s management does not believe
that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the
accompanying unaudited condensed financial statements.
Note 3–- Initial Public Offering
On February 22, 2021, the Company consummated
its Initial Public Offering of 23,000,000 Units, including 3,000,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds
of $230.0 million, and incurring offering costs of approximately $13.1 million, of which approximately $8.1 million was for deferred underwriting
commissions.
Each Unit consists of one Class A ordinary share
and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase
one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment (see Note 7).
Note 4–- Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of 4,400,000 Private Placement Warrants, at a price of $1.50 per
Private Placement Warrant with the Prior Sponsor, generating gross proceeds of $6.6 million, and incurring offering costs of approximately
$7,000. On June 15, 2022, the Prior Sponsor transferred 4,400,000 Private Placement Warrants to the New Sponsor.
Each whole Private Placement Warrant is exercisable
for one whole Class A ordinary share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement
Warrants to the Prior Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement
Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
The Sponsor agreed, subject to limited exceptions,
not to transfer, assign or sell any of its Private Placement Warrants until 30 days after the completion of the initial Business Combination.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5–- Related Party Transactions
Forward Purchase Agreement
In connection with the consummation of the Initial Public Offering, the
Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with the Prior Sponsor, which provides
for the purchase of $20.0 million Forward Purchase Units, which at the option of the Prior Sponsor, can be increased to $50.0 million,
with each Forward Purchase Unit consisting of one Class A ordinary share (the “Forward Purchase Shares”) and one-third of
one warrant to purchase one Class A ordinary share at $11.50 per share (the “Forward Purchase Warrants,” together with the
Forward Purchase Units and the Forward Purchase Shares, the “Forward Purchase Securities”), for a purchase price of $10.00
per Forward Purchase Unit, in a private placement to occur concurrently with the closing of the initial Business Combination. The
purchase under the Forward Purchase Agreement is required to be made regardless of whether any Class A ordinary shares are redeemed by
the Public Shareholders. The Forward Purchase Securities will be issued only in connection with the closing of the initial Business Combination.
The proceeds from the sale of Forward Purchase Securities may be used as part of the consideration to the sellers in the initial Business
Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction company. The
Company does not intend to implement the forward purchase agreement, and on April 17, 2023, the Company sent a notice of mutual termination
of the forward purchase agreement to the prior sponsor. The Company classified the Forward Purchase Units as derivative instruments on
the accompanying condensed balance sheets. The initial value of the Forward Purchase Units was insignificant, and the Company recognized
a loss in the change in the fair value of the derivative assets (liabilities) of approximately $0 and $30,000 for the three months ended
March 31, 2023 and 2022, respectively.
Founder Shares
On September 21, 2020, the Company issued 4,812,500 Class
B ordinary shares, par value $0.001 per share (the “Founder Shares”) to the Prior Sponsor. On September 23, 2020, the
Prior Sponsor paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange for issuance of the Founder
Shares. On January 25, 2021, the Company effected a stock dividend of 1,437,500 shares with respect to Class B ordinary shares,
resulting in an aggregate of 6,250,000 Founder Shares outstanding. The Prior Sponsor agreed to forfeit up to an aggregate of 750,000 Founder
Shares, on a pro rata basis, to the extent that the option to purchase additional Units was not exercised in full by the underwriters,
so that the Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering
plus the 2,000,000 Forward Purchase Shares underlying the Forward Purchase Units (which at the option of the Prior Sponsor can
be increased to up to 5,000,000 Forward Purchase Shares). On February 22, 2021, the underwriter fully exercised its over-allotment
option; thus, these 750,000 Founder Shares were no longer subject to forfeiture.
On June 15, 2022, the Prior Sponsor transferred
all 6,250,000 Founder Shares to the New Sponsor.
The New Sponsor agreed not to transfer, assign
or sell any of its Founder Shares until the earlier to occur of (i) one year after the date of the consummation of the initial Business
Combination, or earlier if, subsequent to the initial Business Combination, (x) the last reported sale price of the Class A ordinary shares
equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading
days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the Company consummates
a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders having the right
to exchange their Ordinary shares for cash, securities or other property.
Related Party Loans
On September 23, 2020, the Prior Sponsor agreed
to loan the Company up to $250,000 to cover costs related to the Initial Public Offering pursuant to a promissory note, which was
later amended on January 22, 2021 (the “IPO Note”). The IPO Note was non-interest bearing, unsecured and due upon the closing
of the Initial Public Offering. As of February 22, 2021, the Company borrowed approximately $111,000 under the IPO Note. The Company
repaid the IPO Note in full on February 24, 2021. Subsequent to the repayment, the facility was no longer available to the Company.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor, members of the Company’s founding team or any of their affiliates may, but
are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business
Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise,
the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does
not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lenders’ discretion, up to $1.5 million of such Working Capital Loans
may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical
to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined
and no written agreements exist with respect to such loans. As of March 31, 2023 and December 31, 2022, the Company had no borrowings
under any Working Capital Loans.
On April 13, 2022, the Company issued the Promissory Note to the Prior
Sponsor for an aggregate of up to $200,000. On May 25, 2022, the Prior Sponsor amended the Promissory Note agreement and increased the
principal amount to $400,000. The Promissory Note bears no interest, may be prepaid at any time and is due and payable within one year
from the date of the first drawdown of the amended and restated note, or June 7, 2023. On June 30, 2022, the Prior Sponsor assigned all
of its rights and obligations under the Promissory Note to the New Sponsor in connection with the Sponsor Transaction. As of March 31,
2023, the Company has fully drawn $400,000 under the Promissory Note. As of March 31, 2023 and December 31, 2022, approximately $400,000
and $319,000 were outstanding under the Promissory Note, respectively.
Related Party Advance
For the three months ended March 31, 2023, the
Sponsor had paid $24,642 of expenses on behalf on Company, which are included in advance from related parties in the accompanying balance
sheet as of March 31, 2023.
Administrative Services Agreement
Commencing on February 17, 2021, through the earlier of consummation
of the initial Business Combination and the liquidation, the Company agreed to pay Kismet LLC, an affiliate of the Prior Sponsor, $10,000 per
month for office space, utilities, secretarial support and administrative services. Fees for such services were waived for the three months
ended March 31, 2022.
On June 30, 2022, in connection with the Sponsor
Transaction, the Company and Kismet LLC mutually terminated the Administrative Services Agreement. As a result, the Company is no longer
obligated to pay a $10,000 monthly fee pursuant to the Administrative Services Agreement.
Director Compensation
Commencing on February 18, 2021, the Company paid
its initial directors $40,000 each. On May 25, 2022, Mr. Verdi Israelyan, a former director, waived his right to receive a payment
of $40,000. The Company also granted two of its independent directors, Messrs. Tompsett and Zilber, an option each to purchase 40,000 Class
A ordinary shares at an exercise price of $10.00 per share, which will vest upon the consummation of the initial Business Combination
and will expire five years after the date on which it first became exercisable Further, following the approval of the Extension,
the compensation committee of the Company’s board of directors has approved the transfers by the Sponsor of (a) 15,000 Founder Shares
to each of Messrs. Zilber and Tourevski and (b) 20,000 Founder Shares to Mr. Tompsett as additional compensation, which transfers will
take place prior to the closing of the initial Business Combination. Both the Founder Shares and the options granted to the directors
are subject to forfeiture in the event a director ceases to serve on the Company’s board prior to the closing of a Business Combination.
In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing
due diligence on suitable Business Combinations. The Company’s audit committee reviews, on a quarterly basis, all payments that
are made to the Sponsor, officers or directors, or the Company’s or their affiliates.
On May 25, 2022, one of the Company’s former
directors waived his right to receive a payment of $40,000 and the Company recorded approximately $0 and $15,000 of director
compensation during three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company
had no amounts outstanding in relation to the director compensation.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Departure and Appointment of Officers
On June 30, 2022, concurrently with the Sponsor
Transaction, Ivan Tavrin, Chief Executive Officer and Chairman of the Company’s board of directors, resigned as Chairman and Chief
Executive Officer of the Company, and as the Company’s principal financial and accounting officer.
Effective June 30, 2022, the Company’s board
of directors appointed Mr. Dimitri Elkin to serve as the Company’s Chief Executive Officer. Mr. Elkin is also serving as the Company’s
principal financial and accounting officer.
On September 5, 2022, Verdi Israelyan, resigned
from the board of directors of the Company. Mr. Israelyan resignation was not the result of any dispute or disagreement with the Company
or the Company’s board of directors on any matter relating to the Company’s operations, policies or practices. On March 27,
2023, the board of directors elected Konstantin Tourevski as a director and as a member of the audit committees to fill the vacancy caused
by the resignation of Mr. Israelyan.
Note 6 - Commitments and Contingencies
Registration Rights
The holders of the Founder Shares and Private
Placement Warrants (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans) were entitled to registration rights pursuant to a registration rights agreement dated
February 17, 2021 (the “Registration Rights Agreement”). The holders of these securities are entitled to make up to three
demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The
Company will bear the expenses incurred in connection with the filing of any such registration statements. On June 30, 2022, in connection
with the Sponsor Transaction, the Prior Sponsor assigned to the New Sponsor all of its rights and obligations under the Registration Rights
Agreement.
Pursuant to the Forward Purchase Agreement, the
Company agreed to use its commercially reasonable efforts (i) to file within 30 days after the closing of the initial Business Combination
a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying
Class A Ordinary Shares), (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later
than sixty (60) days after the initial filing, and (iii) to maintain the effectiveness of such registration statement until the earliest
of (A) the date on the Prior Sponsor or its assignees cease to hold the securities covered thereby and (B) the date all of the securities
covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the Forward
Purchase Agreement provides for “piggy-back” registration rights to the holders of Forward Purchase Securities to include
their securities in other registration statements filed by the Company.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from February 17, 2021, to purchase up to 3,000,000 additional Units at the Initial Public Offering price less the underwriting
discounts and commissions. On February 22, 2021, the underwriters fully exercised their over-allotment option.
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $4.6 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35
per Unit, or approximately $8.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The
deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.
On August 11, 2022 and September 6, 2022, two
of the underwriters in the initial public offering irrevocably waived their rights to receive an aggregate of approximately $5.2 million
of deferred underwriting discounts due under the underwriting agreements consummated in connection with the initial public offering. We
recognized the portion allocated to Public Shares of approximately $5.0 million as an adjustment to the carrying value of the Class A
ordinary shares subject to possible redemption and the remaining balance of approximately $0.2 million as a gain from extinguishment of
deferred underwriting commissions allocated to derivative warrant liabilities.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect
on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily
determinable as of the date of these unaudited condensed financial statements. The accompanying unaudited condensed financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
In February 2022, a military conflict started
between Russia and Ukraine. The ongoing military conflict between Russia and Ukraine has provoked strong reactions from the United States,
the United Kingdom, the European Union and various other countries around the world, including the imposition of broad financial and economic
sanctions against Russia. Further, the precise effects of the ongoing military conflict and these sanctions on the global economies remain
uncertain as of the date of the accompanying unaudited condensed financial statements. The specific impact on the Company’s financial
condition, results of operations, and cash flows is also not determinable as of the date of the accompanying unaudited condensed financial
statements.
Note 7 - Warrants
As of March 31, 2023 and December 31, 2022, 7,666,667
Public Warrants and 4,400,000 Private Placement Warrants were outstanding.
Public Warrants may only be exercised for a whole
number of Class A Ordinary Shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants
will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or
(b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement
under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the Public Warrants and a current prospectus relating
to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of
the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under certain circumstances).
The Company agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business
Combination, the Company will use commercially reasonable efforts to file with the SEC and have an effective registration statement covering
the Class A Ordinary Shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A Ordinary
Shares until the warrants expire or are redeemed, as specified in the warrant agreement. 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. Notwithstanding the above, if the 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” and, in the event the Company so elects, the Company will not be required to
file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. 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 an affiliate of the Sponsor, without taking into account any Founder
Shares held by the Sponsor or an affiliate of the Sponsor, 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 completion of the initial Business Combination (net of redemptions),
and (z) the volume-weighted average trading price of the Class A Ordinary Shares during the 20 trading day period starting on the trading
day prior to the day on which the Company completes its initial Business Combination (such price, the “Market Value”) is below
$9.20 per share, 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 $10.00 and $18.00 per share redemption trigger prices described under “Redemption of warrants
when the price per Class A Ordinary Share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A
Ordinary Share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the
Market Value and the Newly Issued Price, respectively.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Private Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class
A Ordinary Shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or sellable until 30 days
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will
be non-redeemable so long as they are held by the initial purchaser or such purchaser’s permitted transferees. If the Private Placement
Warrants are held by someone other than the Initial Shareholder or its permitted transferees, the Private Placement Warrants will be redeemable
by the Company and exercisable by such holders on the same basis as the Public Warrants.
Redemption of Warrants When the Price per Class A Ordinary Share
Equals or Exceeds $18.00
Once the warrants become exercisable, the Company
may call the outstanding warrants (excluding 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; and |
| ● | if,
and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted) for any 20
trading days within a 30 trading day period ending three business days before the Company sends the notice of redemption to the warrant
holders (the “Reference Value”). |
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the warrants
is then effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the 30-trading day redemption
period.
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 a price of $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 Class A Ordinary Shares to be determined by reference to an agreed table based on
the redemption date and the “fair market value” of Class A Ordinary Shares; and |
| ● | if,
and only if, and only if, the Reference Value equals or exceeds $10.00 per Public Share (as adjusted), and |
| ● | if
the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for
redemption on the same terms as the outstanding Public Warrants, as described above. |
The “fair market value” of Class A
Ordinary Shares for the above purpose shall mean the volume-weighted average price of the Class A Ordinary Shares for the 10 trading days
immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be
exercisable in connection with this redemption feature for more than 0.361 Class A Ordinary Shares per warrant (subject to adjustment).
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 8 - Class A Ordinary Shares Subject to
Possible Redemption
The Class A ordinary shares feature certain redemption
rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is
authorized to issue 200,000,000 Class A ordinary shares with a par value of $0.001 per share. Holders of the Class
A ordinary shares are entitled to one vote for each share. In connection with such shareholders’ meeting, shareholders holding 20,451,847 Class
A ordinary shares exercised their right to redeem those shares for cash at an approximate price of $10.20 per share for an aggregate
of approximately $208.5 million. As of March 31, 2023 and December 31, 2022, there were 2,548,153 and 23,000,000 Class A Ordinary
Shares outstanding, respectively, which were all subject to possible redemption and are classified outside of permanent equity in the
accompanying condensed balance sheets.
The Class A Ordinary Shares subject to possible
redemption reflected on the accompanying condensed balance sheets are reconciled on the following table:
Gross proceeds received from Initial Public Offering | |
$ | 230,000,000 | |
Less: | |
| | |
Fair value of Public Warrants at issuance | |
| (6,823,334 | ) |
Offering costs allocated to Class A ordinary shares | |
| (12,685,596 | ) |
Plus: | |
| | |
Accretion on Class A ordinary shares subject to possible redemption | |
| 19,508,930 | |
Class A ordinary shares subject to possible redemption as of December 31, 2021 | |
| 230,000,000 | |
Plus: | |
| | |
Waiver of Class A ordinary shares issuance costs | |
| 5,077,217 | |
Less: | |
| | |
Accretion on Class A ordinary shares subject to possible redemption | |
| (1,872,702 | ) |
Class A ordinary shares subject to possible redemption as of December 31, 2022 | |
| 233,204,515 | |
Less: | |
| | |
Redemptions | |
| (208,524,538 | ) |
Plus: | |
| | |
Accretion on Class A ordinary shares subject to possible redemption | |
| 1,560,982 | |
Class A ordinary shares subject to possible redemption as of March 31, 2023 | |
$ | 26,240,959 | |
Note 9 - Shareholders’ Deficit
Class A Ordinary Shares
The Company is authorized to issue 200,000,000
Class A Ordinary Shares with a par value of $0.001 per share. Holders of the Class A Ordinary Shares are entitled to one vote for each
share. As of March 31, 2023 and December 31, 2022, there were 6,250,000 and 0 Class A Ordinary Shares issued and outstanding, excluding
2,548,153 and 23,000,000 which were subject to possible redemption and included as temporary equity, respectively (see Note 8).
Class B Ordinary Shares
The Company is authorized to issue 10,000,000
Class B Ordinary Shares with a par value of $0.001 per share. As of March 31, 2023 and December 31, 2022, there were 0 and 6,250,000 Class
B Ordinary Shares issued and outstanding, respectively.
Ordinary shareholders of record are entitled to
one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A ordinary
shares and holders of Class B ordinary shares vote together as a single class on all matters submitted to a vote of the shareholders except
as required by law.
The Class B ordinary shares will automatically
convert into Class A ordinary shares at the time of the initial Business Combination or earlier at the option of the holders thereof at
a ratio such that the number of Class A ordinary shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on
an as-converted basis, 20% of the sum of (i) the total number of the Ordinary Shares issued and outstanding upon completion of the
Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or
exercise of any equity-linked securities or rights issued or deemed issued by the Company in connection with or in relation to the completion
of the initial Business Combination (including the Forward Purchase Shares, but not the Forward Purchase Warrants), excluding any Class
A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to
be issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor or any of its affiliates
or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B ordinary shares
convert into Class A ordinary shares at a rate of less than one-to-one.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 10 - Fair Value Measurements
The following tables present information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2023 and December 31,
2022 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
| |
Fair Value Measured as of March 31, 2023 | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | |
Liabilities: | |
| | |
| | |
| |
Derivative liabilities - Public Warrants | |
$ | — | | |
$ | 172,500 | | |
$ | — | |
Derivative liabilities - Private Placement Warrants | |
$ | — | | |
$ | 99,000 | | |
$ | — | |
| |
Fair Value Measured as of December 31, 2022 | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | |
Assets | |
| | |
| | |
| |
Investments held in Trust Account - U.S. Treasury Securities | |
$ | 233,304,515 | | |
$ | — | | |
$ | — | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative liabilities - Public Warrants | |
$ | — | | |
$ | 19,167 | | |
$ | — | |
Derivative liabilities - Private Placement Warrants | |
$ | — | | |
$ | 11,000 | | |
$ | — | |
Transfers to/from Levels 1, 2, and 3 are recognized
in the beginning of the reporting period. The estimated fair value of the Public Warrants was transferred from a Level 3 measurement to
a Level 1 fair value measurement in April 2021, when the Public Warrants were separately listed and traded. The estimated fair value of
the Private Placement Warrants was transferred from a Level 3 measurement to a Level 2 fair value measurement during the year ended December
31, 2021. The estimated fair value of the Public Warrants transferred to a Level 2 measurement during the quarter ending December 31,
2022 due to low trading volume. There were no transfers to/from Levels 1, 2, and 3 during the three months ended March 31, 2023.
Level 1 assets include investments in mutual funds
that invest solely in U.S. government securities. The Company uses inputs such as actual trade data, quoted market prices from dealers
or brokers, and other similar sources to determine the fair value of its investments.
The fair value of the Public Warrants was initially
measured using a Monte-Carlo simulation and has subsequently been measured based on the market price of such warrants at each measurement
date when separately listed and traded. The fair value of the Private Placement Warrants was initially measured using a Black-Scholes
Option Pricing Model and subsequently using the market value of the Public Warrants. For the three months ended March 31, 2023 and 2022,
the Company recognized a decrease/increase in the fair value of derivative warrant liabilities of approximately $241,000 and $4.2 million,
respectively, presented on the accompanying condensed statements of operations.
The Company utilizes John C. Hull’s Options, Futures, and Other Derivatives
model to estimate the fair value of the Forward Purchase Units at each measurement date. As the Company does not intend to implement the
forward purchase agreement, the Company determined the fair value of the Forward Purchase Units as of March 31, 2023 and December 31,
2022 was deminmus. The Company recognized expense in the change in fair value of the Forward Purchase Units for the three months ended
March 31, 2023 and 2022 was approximately $0 and $30,000, respectively.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The change in the fair value of the Level
3 derivative warrant liabilities for three months ended March 31, 2022 is summarized as follows:
Derivative assets (liabilities) as of January 1, 2022 | |
$ | 88,970 | |
Change in fair value of derivative assets and liabilities | |
| 30,204 | |
Derivative assets (liabilities) as of March 31, 2022 | |
$ | 119,174 | |
The estimated fair value of the derivative assets/liabilities
of the Forward Purchase Units is determined using Level 3 inputs. However, inherent uncertainties are involved. If factors or assumptions
change, the estimated fair values could be materially different. Inherent in the John C Hull’s Options, Futures and Other Derivatives
model are assumptions related to expected, expected life, risk-free interest rate and probability of completing a Business Combination.
The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected
remaining life of the Forward Purchase Units. The expected life of the Forward Purchase Units is assumed to be equivalent to their remaining
contractual term.
Note 11 - Subsequent Events
Management has evaluated subsequent events
to determine if events or transactions occurring after the balance sheet date through the date the accompanying unaudited condensed
financial statements were issued. Based upon this review, other than the below, the Company did not identify any subsequent event
that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.
Subsequent to March 31, 2023, in connection with
the Extension, as described in Note 1, the Sponsor deposited an additional $60,000 into the Trust Account to extend the date by which
the Company must consummate an initial Business Combination to May 22, 2023.
On May 22, 2023, the board approved to extend the date by which the
Company must consummate an initial Business Combination to June 22, 2023. Pursuant to the Extension, as described in Note 1, the Sponsor
will deposit an additional $60,000 into the Trust Account.