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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
Quarterly Report
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2023
 
 
ESGEN Acquisition Corporation
(Exact name of registrant as specified in its charter)
 
 
 
Cayman Islands
 
001-40927
 
98-1601409
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification Number)
5956 Sherry Lane
Suite 1400
Dallas, Texas 75225
(Address of principal executive offices, including zip code)
(214)987-6100
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Units, each consisting of one Class A ordinary share, $0.0001 par value, and
one-half
of one redeemable warrant
 
ESACU
 
The Nasdaq Stock Market LLC
Class A ordinary shares included as part of the units
 
ESAC
 
The Nasdaq Stock Market LLC
Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50
 
ESACW
 
The Nasdaq Stock Market LLC
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in
Rule 12b-2of
the Exchange Act.
 
Large accelerated filer
 
☐
  
Accelerated filer
 
☐
Non-accelerated
filer
 
☒
  
Smaller reporting company
 
☒
 
  
Emerging growth company
 
☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Exchange Act):    Yes  ☒    No  ☐
As of August 14, 2023, 2,896,555 Class A ordinary shares, par value $0.0001, and 6,900,000 Class B ordinary shares, par value $0.0001, were issued and outstanding.
 
 
 

ESGEN ACQUISITION CORPORATION

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023

TABLE OF CONTENTS

 

     Page  

PART 1 – FINANCIAL INFORMATION

   

Item 1. Financial Statements (Unaudited)

      1  

Condensed Balance Sheets as of June 30, 2023 and December 31, 2022

      1  

Condensed Statements of Operations for the three and six months ended June 30, 2023 and 2022

      2  

Condensed Statements of Changes in Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit for the three and six months ended June 30, 2023 and 2022

      3  

Condensed Statements of Cash Flows for the six months ended June 30, 2023 and 2022

      4  

Notes to Condensed Financial Statements

      5  

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

      21  

Item 3. Quantitative and Qualitative Disclosures about Market Risk

      26  

Item 4. Control and Procedures

      27  

PART II – OTHER INFORMATION

      27  

Item 1. Legal Proceedings

      27  

Item 1A. Risk Factors

      27  

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

      28  

Item 3. Defaults Upon Senior Securities

      28  

Item 4. Mine Safety Disclosures

      28  

Item 5. Other Information

      28  

Item 6. Exhibits

      29  

SIGNATURES

      30  

 

i

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
ESGEN ACQUISITION CORPORATION
CONDENSED BALANCE SHEETS
(UNAUDITED)
 
 
  
June 30, 2023
 
 
December 31, 2022
 
Assets
  
 
Current assets:
  
 
Cash
    $ 50,193     $ 614,767  
Prepaid expense
s
      13,627       31,110  
    
 
 
    
 
 
  
Total current assets
   
 
63,820
 
  
 
645,877
 
Non-current
assets:
                 
Marketable securities held in Trust Account
      31,631,853       285,506,568  
    
 
 
    
 
 
  
Total assets
   
$
31,695,673
 
  
$
286,152,445
 
    
 
 
    
 
 
  
Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
                 
Current liabilities:
                 
Accounts payable and accrued expenses
    $ 4,664,539     $ 1,866,992  
Due to related part
y
      279,193       144,193  
Promissory note—related party
      687,208       171,346  
    
 
 
    
 
 
  
Total current liabilities
   
 
5,630,940
 
  
 
2,182,531
 
Non-current
liabilities:
                 
Warrant liabilities
      2,049,024       796,224  
Deferred underwriters’ fee
      —         9,660,000  
    
 
 
    
 
 
  
Total liabilities
   
$
7,679,964
 
  
$
12,638,755
 
    
 
 
    
 
 
  
Commitment and Contingencies
             
Class A ordinary shares subject to possible redemption, $0.0001 par value; 2,896,555 and 27,600,000 shares at redemption value as of June 30, 2023 and December 31, 2022, respectively
      31,631,853       285,506,568  
Shareholders’ Deficit:
                 
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding
   
 
—  
 
  
 
—  
 
Class A shares, $0.0001 par value; 250,000,000 shares authorized; none issued or outstanding (excluding
2,896,555 and 27,600,000 shares subject to possible redemption) as of June 30, 2023 and December 31, 2022,
respectively
   
 
—  
 
  
 
—  
 
Class B shares, $0.0001 par value; 25,000,000 shares authorized; 6,900,000 shares issued and outstanding
      690       690  
Accumulated deficit
      (7,616,834 )      (11,993,568 ) 
    
 
 
    
 
 
  
Total shareholders’ deficit
   
 
(7,616,144
)
 
 
 
(11,992,878
) 
    
 
 
    
 
 
  
Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
   
$
31,695,673
 
  
$
286,152,445
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
1
ESGEN ACQUISITION CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
 
 
For the Three Months Ended
June 30,
 
 
For the Six Months Ended

June 30,
 
 
 
2023
 
 
2022
 
 
2023
 
 
2022
 
 
 
 
 
Legal and professional fees
   $ 1,675,962     $ 160,057     $ 3,044,803     $ 791,522  
Insurance
     6,036       131,853       22,566       262,257  
Other operating costs
     110,714       79,833       207,924       160,954  
Operating cost—related party
     30,000       30,000       60,000       60,000  
   
 
 
    
 
 
    
 
 
    
 
 
  
Loss from operations
  
 
(1,822,712
) 
  
 
(401,743
) 
  
 
(3,335,293
) 
  
 
(1,274,733
) 
Other income (expense):





 






Interest income on marketable securities held in Trust Account
     365,224       368,774       1,305,870       386,945  
Recovery of offering costs allocated to warrants
     425,040       —         425,040       —    
Change in fair value of warrant liabilities
     (378,624 )      1,527,600       (1,252,800 )      8,262,960  
   
 
 
    
 
 
    
 
 
    
 
 
  
Total other income, net
     411,640       1,896,374       478,110       8,649,905  
Net (loss) income
  
$
(1,411,072
)
 
  
$
1,494,631
 
  
$
(2,857,183
)
 
  
$
7,375,172
 
Basic and diluted weighted av
erag
e shares outstanding of Class A ordinary shares
     2,896,555       27,600,000       5,489,734       27,600,000  
Basic and diluted net (loss) income per share, Class A
  
$
(2.21
)
  
$
0.05
 
  
$
(0.97
) 
  
$
0.22
 
Basic and diluted weighted average shares outstanding of Class B ordinary shares
     6,900,000       6,900,000       6,900,000       6,900,000  
Basic and diluted net income per share, Class B
  
$
0.72
 
  
$
0.03
 
  
$
0.36
 
  
$
0.20
 
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
2
ESGEN ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CHANGES IN ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023
 

 
 
Class A
Ordinary share subject to
possible redemption
 
 
Class B
Ordinary share
 
 
Additional

Paid-in

Capital
 
 
Accumulated

Deficit
 
 
Total

Shareholders’

Deficit
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
Balance as of December 31, 2022
  
 
27,600,000
 
  
$
285,506,568
 
  
 
6,900,000
 
  
$
690
 
  
$
—  
    
$
(11,993,568
) 
  
$
(11,992,878
) 
Accretion of ordinary shares subject to possible redemption
     —         1,288,233       —         —         —         (1,288,233 )      (1,288,233 ) 
Redemption of Class A ordinary shares subject to possible redemption
     (24,703,445 )      (255,875,758 )      —         —         —         —         —    
Net loss
     —         —         —         —         —         (1,446,111 )      (1,446,111 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of March 31, 2023
  
 
2,896,555
 
  
 
30,919,043
 
  
 
6,900,000
 
  
 
690
 
  
 
—  
 
  
 
(14,727,912
) 
  
 
(14,727,222
) 
Accretion of ordinary shares subject to possible redemption
     —         712,810       —         —         —         (712,810 )      (712,810 ) 
Waiver of Deferred Underwriters’ Fee
     —         —         —         —         —         9,234,960       9,234,960  
Net loss
     —         —         —         —         —         (1,411,072 )      (1,411,072 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of June 30, 2023
  
 
2,896,555
 
  
$
31,631,853
 
  
 
6,900,000
 
  
$
690
 
  
$
—  
    
$
(7,616,834
)
 
  
$
(7,616,144
)
 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
FOR THE THREE AND SIX MONTHS ENDED
JUNE 
30, 2022
 
 
 
Class A
Ordinary share subject to
possible redemption
 
 
Class B
Ordinary share
 
 
Additional
Paid-in

Capital
 
 
Accumulated

Deficit
 
 
Total
Shareholders’

Deficit
 
 
 
Shares
 
 
Amount
 
 
Shares
 
 
Amount
 
Balance as of December 31, 2021
  
 
27,600,000
 
  
$
281,520,000
 
  
 
6,900,000
 
  
$
690
 
  
$
—  
    
$
(22,341,250
) 
  
$
(22,340,560
) 
Accretion of ordinary shares subject to possible redemption
     —         20,308    
 
—  
 
  
 
—  
 
  
 
—  
 
     (20,308 )      (20,308 ) 
Net income
     —         —      
 
—  
 
  
 
—  
 
  
 
—  
 
     5,880,541       5,880,541  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of March 31, 2022
  
 
27,600,000
 
  
 
281,540,308
 
  
 
6,900,000
 
  
 
690
 
  
$
—  
    
 
(16,481,017
) 
  
 
(16,480,327
) 
Accretion of ordinary shares subject to possible redemption
     —         368,774    
 
—  
 
  
 
—  
 
  
 
—  
 
     (368,774 )      (368,774 ) 
Net income
     —         —      
 
—  
 
  
 
—  
 
  
 
—  
 
     1,494,631       1,494,631  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance as of June 30, 2022
  
 
27,600,000
 
  
$
281,909,082
 
  
 
6,900,000
 
  
$
690
 
  
$
—  
    
$
(15,355,160
) 
  
$
(15,354,470
) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
3
ESGEN ACQUISITION CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 

 
  
For the Six Months Ended
June 30,
 
 
  
2023
 
 
2022
 
Cash flows from operating activities:
  
 
Net (loss) income
    $ (2,857,183 )    $ 7,375,172  
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
                 
Interest earned on cash held in Trust Account
      —         (386,945 ) 
Recovery of offering costs allocated to warrants
      (425,040 )      —    
Change in fair value of warrant liabilities
      1,252,800       (8,262,960 ) 
Changes in current assets and liabilities:
                 
Prepaid expenses
      17,483       253,918  
Accounts payable and accrued expenses
      2,797,547       584,389  
Due to related party
      135,000       60,000  
    
 
 
    
 
 
  
Net cash provided by (used in) operating activities
   
 
920,607
 
  
 
(376,426
) 
    
 
 
    
 
 
  
Cash flows from investing activities:
                 
Reinvestment of marketable securities held in Trust Account
      (1,305,870 )      —    
Extension funding of
 
Trust Account
      (695,173 )      —    
Cash withdrawn from Trust Account in connection with redemption
      255,875,758       —    
    
 
 
    
 
 
  
Net cash provided by investing activities
   
 
253,874,715
 
  
 
—  
 
    
 
 
    
 
 
  
Cash flows from financing activities:
                 
Redemption of Class A common stock subject to possible redemption
      (255,875,758 )      —    
Proceeds from note payable-related party
      515,862       —    
    
 
 
    
 
 
  
Net cash used in financing activities
   
 
(255,359,896
) 
  
 
—  
 
    
 
 
    
 
 
  
Net change in cash
   
 
(564,574
) 
  
 
(376,426
) 
Cash, beginning of the period
      614,767       1,323,903  
    
 
 
    
 
 
  
Cash, end of the period
   
$
50,193
 
  
$
947,477
 
    
 
 
    
 
 
  
Supplemental disclosure of cash flow information:
                 
Change in value of Class A ordinary shares subject to possible redemption
    $ 2,001,043     $ 389,082  
Impact of the waiver of deferred commission by the underwriters
    $ 9,234,960     $ —    
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
4
ESGEN ACQUISITION CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 — Organization and Business Operation
ESGEN Acquisition Corporation (the “Company”) was incorporated as a Cayman Islands exempted company on April 19, 2021. The Company was incorporated 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”). The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company.
As of June 30, 2023, the Company had not commenced any operations. All activity for the period from April 19, 2021 (inception) through June 30, 2023, relates to the Company’s formation and the initial public offering (“Public Offering” or “IPO”) described below and since the closing of the IPO, the search for a prospective initial business combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering (as defined below).
The Company’s sponsor is ESGEN LLC, a Delaware limited liability company (the “Sponsor”).
The registration statement for the Company’s IPO was declared effective on October 19, 2021. On October 22, 2021, the Company consummated its IPO of 27,600,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit and the sale of 14,040,000 warrants (the “Private Placement Warrants”) each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor that closed simultaneously with the Public Offering.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
Following the closing of the IPO on October 22, 2021, $281,520,000 ($10.20 per Unit) from the net proceeds sold in the IPO, including proceeds of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and is only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule2a-7promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Except with respect to interest or other income earned on the funds held in the Trust Account that may be released to the Company to pay its income taxes, if any, the amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly
 
5
tendered in connection with a shareholder vote to amend the amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company did not complete its initial Business Combination within 15 months (which was extended pursuant to shareholder approval of the Charter Amendment (as defined below)) from the closing of this offering (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated the Business Combination within Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares so redeemed.
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial 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 proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement.
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of its initial Business Combination at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the Trust Account is initially $10.20 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters.
The ordinary shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” 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, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company has until August 22, 2023, unless extended with the extension as described in the following paragraph below, to consummate the initial Business Combination. If the Company has not consummated the initial Business Combination within the Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at
a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $100,000 of interest to pay winding up and 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); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its 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.
 
6
On January 18, 2023, the Company held an extraordinary general meeting of shareholders (the “Meeting”) to consider and vote upon, among other things, a proposal to amend the Company’s amended and restated memorandum and articles of association (the “Charter Amendment”) to (i) extend the date by which the Company must consummate its initial business combination (the “Termination Date”) from January 22, 2023 to April 22, 2023 and (ii) in the event that the Company has not consummated an initial business combination by April 22, 2023, to allow the Company, by resolution of the Company’s board of directors (the “Board”) and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to extend the Termination Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination) (each, an “Additional Extension” and such date, an “Additional Extension Date”), provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (a) US$140,000 or (b) $0.04 for each Public Share that is then-outstanding, in exchange for one or more
non-interest
bearing, unsecured promissory notes issued by the Company to the Sponsor or the Sponsor’s affiliates or permitted designees (the “Lenders” and each a “Lender”). In connection with the vote to approve the Charter Amendment, the holders of 24,703,445 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.35 per share, for an aggregate redemption amount of approximately $255,875,758. The Company’s current Additional Extension Date as of the date hereof is August 22, 2023.
The Sponsor and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares; (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company did not complete its initial Business Combination within 15 months from the closing of the Public Offering (which was extended pursuant to shareholder approval of the Charter Amendment) or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial business combination within Combination Period.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the Trust Account, in each case net of the interest that may be withdrawn to pay the Company’s income tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the 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. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure you that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
 
7
Founder Shares
Founder Shares refers to the Class B ordinary shares (the “Founder Shares”) acquired by the initial shareholders prior to the Company’s IPO.
The initial shareholders and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the Business Combination; (ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the Business Combination or to redeem 100% of the Company’s public shares if it does not complete the Business Combination by the Termination Date or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an Business Combination by the Termination Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the Business Combination within the prescribed time frame). If the Company seeks shareholder approval, it will complete the Business Combination only if it is approved by an ordinary resolution or such higher approval threshold as may be required by Cayman Islands law and pursuant to the amended and restated memorandum and articles of association. In such case, the initial shareholders and each member of the management team have agreed to vote their Founder Shares and Public Shares in favor of the Business Combination.
Risks and Uncertainties
The credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia. The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
Going Concern
As of June 30, 2023, the Company had $50,193 in cash held outside of the Trust Account and owes $4,664,539 in accounts payable and accrued expenses and an additional $966,401 to related parties. The Company anticipates that the cash held outside of the Trust Account as of June 30, 2023 will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.
In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic
205-40,
“Presentation of Financial Statements – Going Concern”, the Company has until August 22, 2023 (unless extended as described above) to consummate a Business Combination. If a Business Combination is not consummated by this date and an Additional Extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company. It is uncertain whether the Company will be able to consummate a Business Combination by this time. Management has determined that the mandatory liquidation, should a Business Combination not occur, and an extension is not obtained, as well as the potential for us to have insufficient funds available to operate our business prior to a Business Combination, raises substantial doubt about the Company’s ability to continue as a going concern.
 
8
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Qand
Article 8 of Regulation
S-X
of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K,
which contains the initial audited financial statements and notes thereto for the period ended December 31, 2022, as filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future interim periods.
The breakout of loss from operations on the condensed statement of operations for the three and six months ended June 30, 2022, has been revised to conform to the current presentation. This presentation did not impact any other financial statement line items.
Emerging Growth Company Status
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.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which
 
9
management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
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 June 30, 2023 and December 31, 2022, respectively.
Marketable Securities Held in Trust Account
Substantially all of the assets held in the Trust Account were held in U.S. Money Market Funds. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on marketable securities held in Trust Account in the accompanying statement
s
of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
Fair Value Measurement
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. The Company’s derivative instruments are recorded at fair value on the balance sheet with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheets as current or
non-current
based on whether or not
net-cash
settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Warrant Liability
The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC Topic 815-40 and ASC Topic 480. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This
 
10
liability is subject to
re-measurement
at each balance sheet date. With each
such
re-measurement,
the
warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
Net (Loss) Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per ordinary share is calculated by dividing the net (loss) income by the weighted average ordinary shares outstanding for the respective period. With respect to the accretion of Class A ordinary shares subject to possible redemption, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net (loss) income per ordinary share.
The earnings per share presented in the statement of operations is based on the following:

 
 
  
For the Three Months Ended
June 30,
 
 
For the Six Months Ended
June 30,
 
 
  
2023
 
 
2022
 
 
2023
 
 
2022
 
Net (loss) income
    $ (1,411,072 )    $ 1,494,631     $ (2,857,183 )    $ 7,375,172  
Accretion of temporary equity to redemption value
      8,522,150       (368,774 )      7,233,917       (386,945 ) 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income including accretion of temporary equity to redemption value
    $ 7,111,078     $ 1,125,857     $ 4,376,734     $ 6,988,227  
    
 
 
    
 
 
    
 
 
    
 
 
  
   
    
For the Three Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net income including accretion of temporary equity
    $ 2,133,323     $ 4,977,755     $ 900,686     $ 225,171  
Allocation of accretion of temporary equity to redemption value
      (8,522,150 )     —         368,774       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (6,388,827 )   $ 4,977,755     $ 1,269,460     $ 225,171  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      2,896,555       6,900,000       27,600,000       6,900,000  
Basic and diluted net (loss) income per share
    $ (2.21
)

   $ 0.72     $ 0.05     $ 0.03  
   
    
For the Six Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net (loss) income including accretion of temporary equity
    $ 1,925,763     $ 2,450,971     $ 5,590,582     $ 1,397,645  
Allocation of accretion of temporary equity to redemption value
      (7,233,917 )     —         386,945       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (5,308,154 )    $ 2,450,971     $ 5,977,527     $ 1,397,645  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      5,489,734       6,900,000       27,600,000
    6,900,000  
Basic and diluted net (loss) income per share
    $ (0.97 )    $ 0.36     $ 0.22
  $ 0.20  

11
Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation of diluted loss per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
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. Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.
The Company has made a policy election in accordance with
ASC 480-10-S99-3A
and will recognize changes in redemption value in additional
paid-in
capital (or accumulated deficit in the absence of additional
paid-in
capital) immediately as they occur. The Company recorded accretion of $712,810 and $2,001,043 in accumulated deficit for three and six months ended June 30, 2023, respectively, and $368,774 and $389,082 in accumulated deficit for the three and six months ended June 30, 2022, respectively. For the period ended June 30, 2023, the Company recorded redemption of $255,875,758 and $695,173 was deposited in the Trust Account for extension funding.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes” (“ASC 740”).
ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2023 and December 31, 2022.
The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
 
12
Note 3 — Related Party Transactions
Promissory Notes — Related Party
On April 27, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Public Offering. The Company borrowed a total of $262,268. This loan was
non-interest
bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Public Offering. The loan was to be repaid upon the closing of the Public Offering out of the offering proceeds not held in the Trust Account. In connection with the closing of the Public Offering, the Company paid down $90,922 of the outstanding balance. As of June 30, 2023 and December 31, 2022, the Company had $171,346 outstanding under the promissory note. The Sponsor has agreed to defer repayment of the loan until the close of the Business Combination, respectively.
On April 5, 2023, the Company issued an unsecured promissory note (the “Note”) in the principal amount of up to $1,500,000 to the Sponsor, which may be drawn down by the Company from time to time prior to the consummation of the Company’s Business Combination. The Note does not bear interest, matures on the date of consummation of the Business Combination and is subject to customary events of default. As of June 30, 2023, the Company had $515,862 outstanding under the Note.
Working Capital Loans
In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. As of June 30, 2023 and December 31, 2022, the Company had no borrowings under the Working Capital Loans.
Office Space, Secretarial and Administrative Services
Through the earlier of consummation of the initial Business Combination and the liquidation, the Company incurs $10,000 per month for office space, utilities, secretarial support and administrative services provided by the Sponsor.
 
For the three and six months ended June 30, 2023 and 2022, the Company has incurred
$30,000 and $60,000, 
respectively. No amounts have been paid for these services. As of June 30, 2023 and December 31, 2022, the Company reported on the balance sheets
 $135,000 and $120,000, respectively, pursuant to this agreement, in “Due to related party”.
Note 4 — Prepaid Expenses
The Company’s prepaid expenses as of June 30, 2023 and December 31, 2022 primarily consisted of insurance.
 

 
  
June 30, 2023
 
  
December 31, 2022
 
Prepaid insurance
    $ 3,515      $ 26,081  
Other prepaid expenses
      10,112        5,029  
    
 
 
     
 
 
  
    
$
13,627
 
   
$
31,110
 
    
 
 
     
 
 
  
 
13
Note 5 — Accounts Payable and Accrued Expenses
The Company’s accounts payable and accrued expenses as of June 30, 2023 and December 31, 2022 primarily consisted of legal accruals.
 
 
  
June 30, 2023
 
  
December 31, 2022
 
Legal accrual
  
$
4,435,086
 
  
$
1,705,049
 
Other payables and expenses
  
 
229,453
 
  
 
161,943
 
  
 
 
 
  
 
 
 
  
$
4,664,539
 
  
$
1,866,992
 
  
 
 
 
  
 
 
 
Note 6 — Commitments & Contingencies
Registration and Shareholder Rights
The holders of the 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 Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. However, the registration and expected shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable
lock-up
period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares issuable upon exercise of the private placement warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The holders of the 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 Working Capital Loans and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of its initial Business Combination. However, the registration and expected shareholder rights agreement provides that the Company 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, as described in the following paragraph, 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 the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, the Sponsor and its directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any30-tradingday period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive officers with respect to any founder shares. Any permitted transferees will be subject to
 
14
the same restrictions and other agreements of the Sponsor with respect to any Founder Shares. The Company refers to such transfer restrictions throughout the Public Offering as the lock- up.
In addition, pursuant to the registration and expected shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for election to the board of directors, as long as the Sponsor holds any securities covered by the registration and expected shareholder rights agreement.
Underwriting Agreement
The underwriters were entitled to a deferred underwriting commission of 3.5% of the gross proceeds of the Public Offering upon the completion of the Company’s initial Business Combination. In April 2023, t
he
 
underwriters waived any right to receive the deferred underwriting commission and will therefore receive no additional underwriting commissions in connection with the Closing. As a result, the Company recognized $
425,040
of income and $
9,234,960
was recorded to accumulated deficit in relation to the reduction of the deferred underwriter fee. As of June 30, 2023 and December 31, 2022, the deferred underwriting fee is $
0
and $
9,660,000
, respectively.

To account for the waiver of the deferred underwriting fee, the Company analogized to the SEC staff’s guidance on accounting for reducing a liability for “trailing fees”. Upon the waiver of the deferred underwriter fee, the Company reduced the deferred underwriter liability to $0 and reversed the previously recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense of $425,040, which is the amount previously allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available to Class B ordinary shares by $9,234,960, which was previously allocated to the Class A ordinary shares subject to redemption and accretion recognized at the IPO date.
Proposed Business Combination
On April 19, 2023, the Company entered into a Business Combination Agreement, by and among the Company, ESGEN OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of ESGEN (“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”), the Sunergy equityholders set forth on the signature pages thereto (collectively, “Sellers” and each, a “Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, the Sponsor, and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (the “Business Combination Agreement”).
In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things: (i) prior to the consummation of the Business Combination (the “Closing”), each issued and outstanding Class B ordinary share, par value $0.0001 per share, of ESGEN will convert into one ESGEN Class A ordinary share, par value $0.0001 per share, of ESGEN (the “ESGEN Share Conversion”); and (ii) following the ESGEN Share Conversion but prior to the Closing, ESGEN will, subject to the receipt of the requisite shareholder approval, transfer by way of continuation from the Cayman Islands to the State of Delaware and domesticate as a Delaware corporation (the “Domestication”).
In connection with the Domestication, (A) each outstanding ESGEN Class A Ordinary Share will become one share of Class A common stock, par value $0.0001 per share, of ESGEN, (B) each outstanding warrant to purchase one ESGEN Class A Ordinary Share will become a warrant to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share, and (C) ESGEN will file its certificate of incorporation and will adopt bylaws to serve as its governing documents upon consummation of the Domestication. In connection with the ESGEN Share Conversion and the Domestication, each issued and outstanding unit of ESGEN, each consisting of ESGEN Class A Ordinary Share and
one-half
of one warrant to purchase one ESGEN Class A Ordinary Share (each, an “ESGEN Unit”), that has not been previously separated into the underlying ESGEN Class A Ordinary Shares and underlying ESGEN Warrants prior to the Domestication will be cancelled and will entitle the holder thereof to (x) one share of ESGEN Class A Common Stock and
(y) 
one-half of one

15
warrant representing the right to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions applicable to ESGEN Warrants set forth in the Warrant Agreement, dated as of October 22, 2021, between ESGEN and Continental Stock Transfer & Trust Company (the “Trustee”).
In accordance with the terms and subject to the conditions of the Business Combination Agreement, Sunergy will cause all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries or securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire, any equity interests of Sunergy or any subsidiary thereof (collectively, the “Sunergy Convertible Interests”) existing immediately prior to the Closing either to exchange or convert all such holder’s Sunergy Convertible Interests into limited liability interests of Sunergy (the “Sunergy Company Interests”) in accordance with the governing documents of Sunergy or the Sunergy Convertible Interests (collectively, the “Sunergy Exchanges”).
At the Closing, ESGEN will contribute to OpCo (1) all of its assets (excluding its interests in OpCo, but including the amount of cash in the Trust Account as of immediately prior to the Closing (after giving effect to the exercise of redemption rights by any ESGEN shareholders)), and (2) a number of newly issued shares of Class V common stock of ESGEN, par value $0.0001 per share, which will generally have only voting rights (the “ESGEN Class V Common Stock”), equal to the number of Seller OpCo Units (as defined in the Business Combination Agreement) (the “Seller Class V Shares”) and (y) in exchange, OpCo shall issue to ESGEN (i) a number of common units of OpCo (the “OpCo Units”) which shall equal the number of total shares of ESGEN Class A Common Stock issued and outstanding immediately after the Closing and (ii) a number of warrants to purchase OpCo Units which shall equal the number of SPAC Warrants issued and outstanding immediately after the Closing (the transactions described above in this paragraph, the “ESGEN Contribution”). Immediately following the ESGEN Contribution, (x) the Sellers will contribute to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo will transfer to the Sellers the Seller OpCo Units and the Seller Class V Shares.
The obligation of ESGEN, the Sunergy Parties and OpCo to consummate the Business Combination is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any order, law or other legal restraint or prohibition enacted, issued or promulgated by any court of competent jurisdiction or other governmental entity of competent jurisdiction having the effect of making the Business Combination illegal or otherwise prohibiting the consummation of the Business Combination, (ii) the termination or expiration of any applicable waiting period applicable to the consummation of the Business Combination under the Hart-Scott-Rodino Act, (iii) the effectiveness of the Registration Statement on Form
S-4
(the “Registration Statement”) in accordance with the provisions of the Securities Act, registering the ESGEN Class A Common Stock to be issued in connection with the Business Combination Agreement, (iv) receipt of the required approvals of ESGEN’s shareholders at a meeting of the shareholders of ESGEN in connection with the Business Combination, (v) the ESGEN Class A Common Stock to be issued in connection with the Business Combination immediately after Closing shall be listed on Nasdaq and ESGEN will be able to satisfy any continued listing requirements of Nasdaq immediately after Closing, (vi) if the ESGEN shareholders do not approve the Redemption Limitation Amendment (as defined in the Business Combination Agreement), ESGEN having at least $5,000,001 of net tangible assets (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act) remaining immediately after any holders of the ESGEN Class A Ordinary Shares exercise their redemption rights, (vii) the members of the post-Business Combination ESGEN board of directors shall have been elected or appointed in accordance with the Business Combination Agreement and (viii) the aggregate transaction proceeds, including from the Trust Account after giving effect to the exercise of redemption rights by any ESGEN shareholders pursuant to the ESGEN amended and restated memorandum and articles of association, as amended, and the proceeds resulting from the Initial PIPE Investment (as defined below) and any financing agreements executed in furtherance of the Business Combination Agreement, shall be greater or equal to $20.0 million.
Concurrently with the execution of the Business Combination Agreement, ESGEN entered into a subscription agreement (the “Initial Subscription Agreement”) with Sponsor. Pursuant to the Initial Subscription Agreement, Sponsor agreed to subscribe for and purchase, and ESGEN agreed to issue and sell to Sponsor, concurrently with
 
16
the Closing, an aggregate of 1,000,000 shares of ESGEN Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $10,000,000 (the “Initial PIPE Investment”). The closing of the Initial PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Initial Subscription Agreement provides that ESGEN will grant Sponsor certain customary registration rights. In addition to the Initial PIPE Investment, under the Business Combination Agreement, ESGEN and Sunergy have agreed to use their reasonable best efforts to identify other investors to enter into equity financing agreements (the “Additional Financing Agreements” and, together with the Initial Subscription Agreement, the “Financing Agreements”), in form and substance reasonably acceptable to ESGEN and Sunergy, to support the transaction (such equity financing under the Financing Agreements, collectively, herein referred to as the “Private Placements”).
The Business Combination is expected to close in the fourth quarter of 2023, following the receipt of the required approvals by our shareholders and the fulfillment of other customary closing conditions.
Note
7
 — Warrant Liabilities
The Company accounts for the 27,840,000 warrants issued in connection with the Public Offering (13,800,000 Public Warrants and 14,040,000 Private Placement Warrants) in accordance with the guidance contained in ASC Topic
815-40.
Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company classifies each warrant as a liability at its fair value. This liability is subject to remeasurement at each balance sheet date.
With each such remeasurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
Public Warrants
Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, 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, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “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 the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a post-
 
17
effective amendment to the registration statement of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per Class
 A ordinary share equals or exceeds $18.00.
Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per warrant;
 
  •  
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within
a30-tradingday
period ending three trading days before the Company sends the notice of redemption to the warrant holders.
Redemption of warrants when the price per Class
 A ordinary share equals or exceeds $10.00.
Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants:
 
  •  
in whole and not in part;
 
  •  
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within the30-tradingday period ending three trading days before the Company sends the notice of redemption to the warrant holders;
 
18
Private Warrants
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in the Public Offering. Any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants will require a vote of holders of at least 50% of the number of the then outstanding Private Placement Warrants.
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the IPO. Accordingly, the Company has classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. This liability is subject to
re-measurement
at each balance sheet date. With each such
re-measurement,
the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
Note
8
 — Recurring Fair Value Measurements
As of June 30, 2023 and December 31, 2022, investments held in the Trust Account are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
The Company’s Public Warrants are traded on the Nasdaq. As such, the Public Warrant valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of the Public Warrant liabilities is classified within Level 1 of the fair value hierarchy.
At June 30, 2023 and December 31, 2022, the Company considers the Private Warrants to be economically equivalent to the Public Warrants. As such, the valuation of the Public Warrants was used to value the Private Warrants. The fair value of the Private Warrant liabilities is classified within Level 2 of the fair value hierarchy.
The following tables presents fair value information as of June 30, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
 
June 30, 2023
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
Assets:
  
  
  
  
Marketable securities held in Trust Account
    $ 31,631,853      $ —        $ —        $ 31,631,853  
Liabilities:
                                    
Public Warrants
      1,015,680        —          —          1,015,680  
Private Warrants
      —          1,033,344        —          1,033,344  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
966,000
 
   
$
982,800
 
   
$
—  
     
$
1,948,800
 
    
 
 
     
 
 
     
 
 
     
 
 
  
         
December 31, 2022
   
Level 1
     
Level 2
     
Level 3
     
Total
  
Assets:
                                    
Marketable securities held in Trust Account
    $ 285,506,568      $ —        $ —        $ 285,506,568  
Liabilities:
                                    
Public Warrants
      394,680        —          —          394,680  
Private Warrants
      —          401,544        —          401,544  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
394,680
 
   
$
401,544
 
   
$
—  
     
$
796,224
 
    
 
 
     
 
 
     
 
 
     
 
 
  
There were no transfers to or from Levels 1, 2 or 3.
 
19
Note
9
 — Shareholders’ Deficit
Preference shares
—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2023 and December 31, 2022, there were no preference shares issued or outstanding.
Class
 A ordinary shares
—The Company is authorized to issue 250,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of June 30, 2023 and December 31, 2022, there were no Class A ordinary shares issued or outstanding other than the 2,896,555 and 27,600,000 Class A ordinary shares subject to possible redemption that are accounted for outside of the shareholders’ deficit section of the condensed balance sheets, respectively.
Class
 B ordinary shares
—The Company is authorized to issue 25,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. As of June 30, 2023 and December 31, 2022, there were 6,900,000 Class B ordinary shares issued and outstanding.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The
 Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if the Company fails to consummate an initial Business Combination) 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 ordinary shares issued and outstanding upon completion of the 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 consummation of the initial Business Combination, 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, any of its affiliates or any members 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.

This
 is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of
20
% of the total number of shares to be outstanding prior to the initial Business Combination.
 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us” or “we” refer to ESGEN Acquisition Corporation. 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 on Form 10-Q (this “Quarterly Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report contains, and our officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding:

 

  •  

our ability to select an appropriate target business or businesses;

 

  •  

our ability to complete our initial business combination;

 

  •  

our expectations around the performance of a prospective target business or businesses;

 

  •  

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

 

  •  

our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination;

 

  •  

our potential ability to obtain additional financing to complete our initial business combination;

 

  •  

our pool of prospective target businesses;

 

  •  

the ability of our officers and directors to generate a number of potential business combination opportunities;

 

  •  

our public securities’ potential liquidity and trading;

 

  •  

the lack of a market for our securities;

 

  •  

the use of proceeds not held in the trust account or available to us from interest income on the trust account balance;

 

  •  

the trust account not being subject to claims of third parties; or

 

  •  

our financial performance following our initial public offering.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. You should not take any statement regarding past trends or activities as representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.

Overview

We were incorporated as a Cayman Islands exempted company on April 19, 2021 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”). We will not be limited to a particular industry or geographic region in our identification and acquisition of a target company.

Our sponsor is ESGEN LLC, a Delaware limited liability company (the “Sponsor”).

 

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The registration statement for our initial public offering (“initial public offering” or “Public Offering”) was declared effective on October 19, 2021. On October 22, 2021, we consummated our initial public offering of 27,600,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit (which included the full exercise of the underwriters’ over-allotment option), and the sale of 14,040,000 warrants (the “Private Placement Warrants”) each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per Private Placement Warrant in a private placement to our sponsor that closed simultaneously with the initial public offering.

Following the closing of our initial public offering on October 22, 2021, $281,520,000 ($10.20 per Unit) from the net proceeds sold in our initial public offering, including proceeds of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and will only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.

Prior to shareholder approval of the Charter Amendment (as defined below), we had 15 months from the closing of our initial public offering to consummate the initial Business Combination. If we have not consummated the initial Business Combination within the Combination Period, we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay income taxes, if any (less up to $100,000 of interest to pay winding up and 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); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

On January 18, 2023, the Company held an extraordinary general meeting of shareholders (the “Meeting”) to consider and vote upon, among other things, a proposal to amend the Company’s amended and restated memorandum and articles of association (the “Charter Amendment”) to (i) extend the date by which the Company must consummate its initial business combination (the “Termination Date”) from January 22, 2023 to April 22, 2023 and (ii) in the event that the Company has not consummated an initial business combination by April 22, 2023, to allow the Company, by resolution of the Company’s board of directors (the “Board”) and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to extend the Termination Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination) (each, an “Additional Extension” and such date, an “Additional Extension Date”), provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (a) US $140,000 or (b) $0.04 for each Public Share that is then-outstanding, in exchange for one or more non-interest bearing, unsecured promissory notes issued by the Company to the Sponsor or the Sponsor’s affiliates or permitted designees (the “Lenders” and each a “Lender”). In connection with the vote to approve the Charter Amendment, the holders of 24,703,445 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.35 per share, for an aggregate redemption amount of $255,875,758. The Company’s current Additional Extension Date as of the date hereof is August 22, 2023.

On April 19, 2023, the Company entered into a Business Combination Agreement, by and among the Company, ESGEN OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of ESGEN (“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”), the Sunergy equity holders set forth on the signature pages thereto (collectively, “Sellers” and each, a “Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, the Sponsor, and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (the “Business Combination Agreement”).

In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things: (i) prior to the consummation of the Business Combination (the “Closing”), each issued and outstanding Class B ordinary share, par value $0.0001 per share, of ESGEN will convert into one ESGEN Class A ordinary share, par value $0.0001 per share, of ESGEN (the “ESGEN Share Conversion”); and (ii) following the ESGEN Share Conversion but prior to the Closing, ESGEN will, subject to the receipt of the requisite shareholder approval, transfer by way of continuation from the Cayman Islands to the State of Delaware and domesticate as a Delaware corporation (the “Domestication”).

In connection with the Domestication, (A) each outstanding ESGEN Class A Ordinary Share will become one share of Class A common stock, par value $0.0001 per share, of ESGEN, (B) each outstanding warrant to purchase one ESGEN Class A Ordinary Share will become a warrant to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share, and (C) ESGEN will file its certificate of incorporation and will adopt bylaws to serve as its governing documents upon consummation of the Domestication. In connection with the ESGEN Share Conversion and the Domestication, each issued and outstanding unit of ESGEN, each consisting of ESGEN Class A Ordinary Share and one-half of one warrant to purchase one ESGEN Class A Ordinary Share (each, an “ESGEN Unit”), that has not been previously separated into the underlying ESGEN Class A Ordinary Shares and underlying ESGEN Warrants prior to the Domestication will be cancelled and will entitle the holder thereof to (x) one share of ESGEN Class A Common Stock and (y) one-half of one warrant representing the right to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions applicable to ESGEN Warrants set forth in the Warrant Agreement, dated as of October 22, 2021, between ESGEN and Continental Stock Transfer & Trust Company (the “Trustee”).

 

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In accordance with the terms and subject to the conditions of the Business Combination Agreement, Sunergy will cause all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries or securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire, any equity interests of Sunergy or any subsidiary thereof (collectively, the “Sunergy Convertible Interests”) existing immediately prior to the Closing either to exchange or convert all such holder’s Sunergy Convertible Interests into limited liability interests of Sunergy (the “Sunergy Company Interests”) in accordance with the governing documents of Sunergy or the Sunergy Convertible Interests (collectively, the “Sunergy Exchanges”).

At the Closing, ESGEN will contribute to OpCo (1) all of its assets (excluding its interests in OpCo, but including the amount of cash in the Trust Account as of immediately prior to the Closing (after giving effect to the exercise of redemption rights by any ESGEN shareholders)), and (2) a number of newly issued shares of Class V common stock of ESGEN, par value $0.0001 per share, which will generally have only voting rights (the “ESGEN Class V Common Stock”), equal to the number of Seller OpCo Units (as defined in the Business Combination Agreement) (the “Seller Class V Shares”) and (y) in exchange, OpCo shall issue to ESGEN (i) a number of common units of OpCo (the “OpCo Units”) which shall equal the number of total shares of ESGEN Class A Common Stock issued and outstanding immediately after the Closing and (ii) a number of warrants to purchase OpCo Units which shall equal the number of SPAC Warrants issued and outstanding immediately after the Closing (the transactions described above in this paragraph, the “ESGEN Contribution”). Immediately following the ESGEN Contribution, (x) the Sellers will contribute to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo will transfer to the Sellers the Seller OpCo Units and the Seller Class V Shares.

The obligation of ESGEN, the Sunergy Parties and OpCo to consummate the Business Combination is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any order, law or other legal restraint or prohibition enacted, issued or promulgated by any court of competent jurisdiction or other governmental entity of competent jurisdiction having the effect of making the Business Combination illegal or otherwise prohibiting the consummation of the Business Combination, (ii) the termination or expiration of any applicable waiting period applicable to the consummation of the Business Combination under the Hart-Scott-Rodino Act, (iii) the effectiveness of the Registration Statement on Form S-4 (the “Registration Statement”) in accordance with the provisions of the Securities Act, registering the ESGEN Class A Common Stock to be issued in connection with the Business Combination Agreement, (iv) receipt of the required approvals of ESGEN’s shareholders at a meeting of the shareholders of ESGEN in connection with the Business Combination, (v) the ESGEN Class A Common Stock to be issued in connection with the Business Combination immediately after Closing shall be listed on Nasdaq and ESGEN will be able to satisfy any continued listing requirements of Nasdaq immediately after Closing, (vi) if the ESGEN shareholders do not approve the Redemption Limitation Amendment (as defined in the Business Combination Agreement), ESGEN having at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining immediately after any holders of the ESGEN Class A Ordinary Shares exercise their redemption rights, (vii) the members of the post-Business Combination ESGEN board of directors shall have been elected or appointed in accordance with the Business Combination Agreement and (viii) the aggregate transaction proceeds, including from the Trust Account after giving effect to the exercise of redemption rights by any ESGEN shareholders pursuant to the ESGEN amended and restated memorandum and articles of association, as amended, and the proceeds resulting from the Initial PIPE Investment (as defined below) and any financing agreements executed in furtherance of the Business Combination Agreement, shall be greater or equal to $20.0 million.

Concurrently with the execution of the Business Combination Agreement, ESGEN entered into a subscription agreement (the “Initial Subscription Agreement”) with Sponsor. Pursuant to the Initial Subscription Agreement, Sponsor agreed to subscribe for and purchase, and ESGEN agreed to issue and sell to Sponsor, concurrently with the Closing, an aggregate of 1,000,000 shares of ESGEN Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $10,000,000 (the “Initial PIPE Investment”). The closing of the Initial PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Initial Subscription Agreement provides that ESGEN will grant Sponsor certain customary registration rights. In addition to the Initial PIPE Investment, under the Business Combination Agreement, ESGEN and Sunergy have agreed to use their reasonable best efforts to identify other investors to enter into equity financing agreements (the “Additional Financing Agreements” and, together with the Initial Subscription Agreement, the “Financing Agreements”), in form and substance reasonably acceptable to ESGEN and Sunergy, to support the transaction (such equity financing under the Financing Agreements, collectively, herein referred to as the “Private Placements”).

For additional information regarding the Business Combination Agreement, see the Company’s Current Report on Form 8-K filed with the SEC on April 20, 2023.

The Business Combination is expected to close in the fourth quarter of 2023, following the receipt of the required approvals by our shareholders and the fulfillment of other customary closing conditions.

On April 5, 2023, the Company issued an unsecured promissory note (the “Note”) in the principal amount of up to $1,500,000 to the Sponsor, which may be drawn down by the Company from time to time prior to the consummation of the Company’s Business Combination. The Note does not bear interest, matures on the date of consummation of the Business Combination and is subject to customary events of default. As of June 30, 2023, there was approximately $515,862 outstanding under the Note.

 

23

Results of Operations

All of our activity from April 19, 2021 (inception) through June 30, 2023, was in preparation for our initial public offering, and since our initial public offering, including the effectuation of the Charter Amendment and the negotiation and entry into the Business Combination Agreement. We will not generate any operating revenues until the closing and completion of our initial Business Combination.

For the three months ended June 30, 2023, we had a net loss of $1,411,072, which consisted of a change in fair value of warrant liabilities of $378,624 and operating costs of $1,822,712, partially offset by interest income from marketable securities held in the Trust Account of $365,224 and recovery of offering costs allocated to warrants of $425,040.

For the three months ended June 30, 2022, we had a net income of $1,494,631, which consisted of a gain on change in fair value of warrant liabilities of $1,527,600, interest income from marketable securities held in Trust Account of $368,774, offset by operating costs of $401,743.

For the six months ended June 30, 2023, we had a net loss of $2,857,183, which consisted of a change in fair value of warrant liabilities of $1,252,800 and operating costs of $3,335,293, partially offset by interest income from marketable securities held in the Trust Account of $1,305,870 and recovery of offering costs allocated to warrants of $425,040.

For the six months ended June 30, 2022, we had a net income of $7,375,172, which consisted of a gain on change in fair value of warrant liabilities of $8,262,960, interest income from marketable securities held in Trust Account of $386,945, offset by formation and operating costs of $1,274,733.

Liquidity and Capital Resources

As of June 30, 2023, we had cash of $50,193 and owe $4,664,539 in accounts payable and accrued expenses and an additional $996,401 payable to related parties.

Prior to the completion of our initial public offering, our liquidity needs had been satisfied through a capital contribution from the sponsor of $25,000 and a loan to us of up to $300,000 by our sponsor under an unsecured promissory note, which had an outstanding balance of $171,346 at June 30, 2023 and December 31, 2022. The Sponsor has agreed to defer repayment of the loan until the close of the Business Combination. On April 5, 2023, we issued an unsecured promissory note (the “Note”) in the principal amount of up to $1,500,000 to our Sponsor, which may be drawn down by us from time to time prior to the consummation of the initial Business Combination. As of June 30, 2023, there was approximately $515,862 outstanding under the Note.

In addition, in order to finance transaction costs in connection with a business combination, our Sponsor, an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, provide us Working Capital Loans. As of June 30, 2023 and December 31, 2022, there were no amounts outstanding under any Working Capital Loans.

Based on the foregoing, management believes that we will not have sufficient working capital and borrowing capacity to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing. Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

In connection with the company’s assessment of going concern considerations in accordance with ASC Subtopic 205-40, “Presentation of Financial Statements – Going Concern”, the company has until August 22, 2023 (unless extended as described above) to consummate a Business Combination. If a Business Combination is not consummated by this date and an Additional Extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the company. It is uncertain whether the Company will be able to consummate a Business Combination by this time. Management has determined that the mandatory liquidation, should a Business Combination not occur, and an extension is not obtained, as well as the potential for us to have insufficient funds available to operate our business prior to a Business Combination, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. It is uncertain whether the company will be able to consummate a Business Combination or obtain an Additional Extension by this time. No adjustments have been made to the carrying amounts of assets or liabilities should the company be required to liquidate after August 22, 2023 (unless extended as described above).

Contractual Obligations

Other than the below, we do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

Underwriting Agreement

The IPO underwriters were entitled to a deferred underwriting commission of 3.5% of the gross proceeds of our IPO upon the completion of our initial Business Combination. In April 2023, the IPO underwriters waived any right to receive such deferred underwriting commissions and will therefore receive no additional underwriting commissions in connection with the Closing.

 

24

Office Space, Secretarial and Administrative Services

Through the earlier of consummation of the initial Business Combination or the liquidation, the Company incurs $10,000 per month for office space, utilities, secretarial support and administrative services provided by the Sponsor. For the three and six months ended June 30, 2023, the Company incurred $30,000 and $60,000, respectively, pursuant to this agreement. For the three and six months ended June 30, 2023, the Company incurred $30,000 and $60,000, respectively, pursuant to this agreement. No amounts have been paid for these services. As of June 30, 2023 and December 31, 2022, the Company reported on the balance sheets $135,000 and $120,000, respectively, pursuant to this agreement, in “Due to related party”.

Registration Rights

The holders of the 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 Working Capital Loans) are entitled to registration rights pursuant to a registration and shareholder rights agreement signed at the closing of our initial public offering (the “IPO 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 the initial Business Combination. However, the registration and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”) to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the Private Placement Warrants and the respective Class A ordinary shares issuable upon exercise of the Private Placement Warrants, 30 days after the completion of the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements. The holders of the 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 Working Capital Loans and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our initial public offering. 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 its initial Business Combination. However, the registration and shareholder 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, as described in the following paragraph, 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 the initial Business Combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

Except as described herein, the Sponsor and its directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination, or (y) the date on which we complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive officers with respect to any founder shares. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any Founder Shares.

In addition, pursuant to the registration and shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for election to the board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement.

A&R Registration Rights Agreement

The Business Combination Agreement contemplates that, at the Closing, Sunergy, Sunergy’s underlying equityholders and the Initial Shareholders (as defined below) (collectively, the “New PubCo Holders”) and New PubCo will enter into an amended and restated IPO Registration Rights Agreement (the “A&R Registration Rights Agreement”), pursuant to which, among other things, New PubCo and the Initial Shareholders will agree to amend and restate the Registration and Shareholder Rights Agreement, dated as of October 22, 2021, entered into by them in connection with ESGEN’s IPO. Pursuant to the A&R Registration Rights Agreement, New PubCo will agree that, within 30 days following the consummation of the Business Combination, it will use its commercially reasonable efforts to file a resale shelf registration statement on behalf of Sunergy, Sunergy’s underlying equityholders and the Initial Shareholders (the “New PubCo Holders”) registering (i) New PubCo’s private placement warrants, (ii) any outstanding shares of Class A common stock, par value $0.0001 per share, of New PubCo (“New PubCo Class A Common Stock”) held by the New PubCo Holders, (iii) any shares of New PubCo Class A Common Stock issued or issuable upon exchange of an equivalent number of Class B units of OpCo and Class V common stock of New PubCo, par value $0.0001 per share, issued to the Sellers pursuant to the Business Combination Agreement, (iv) any shares of New PubCo Class A Common Stock issued or to be issued to any of the New PubCo Holders in connection with the Business Combination and (v) any other equity security of New PubCo issued or issuable with respect to any of the foregoing by way of a stock dividend or stock split or in connection

 

25

with a combination of shares, recapitalization, merger, consolidation or reorganization (collectively, the “Registrable Securities”); provided, however, that as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such Registrable Securities becomes effective under the Securities Act and such Registrable Securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement, (B) such Registrable Securities shall have been otherwise transferred and such transferee is not entitled to the registration rights provided in the A&R Registration Rights Agreement, (C) such Registrable Securities shall have ceased to be outstanding, or (D) such Registrable Securities may be sold without registration pursuant to Rule 144 and Rule 145, as applicable, promulgated under the Securities Act (or any successor rule promulgated thereto) (but with no volume or other restrictions or limitations).

Additionally, the A&R Registration Rights Agreement will also provide, subject to certain underwriter cutbacks and suspension periods, (i) certain demand rights entitling the New PubCo Holders the right to require New PubCo to effect an underwritten offering and (ii) certain piggyback rights entitling the New PubCo Holders the right to include such New PubCo Holder’s Registrable Securities in any underwritten offering that New PubCo proposes to consummate for its own account or for the account of its stockholders.

Amendment to the Letter Agreement

Concurrently with the execution of the Business Combination Agreement, the Sponsor, the independent directors of the board of directors of ESGEN and one or more client accounts of Westwood Group Holdings, Inc. (successor to Salient Capital Advisors, LLC) (collectively, the “Initial Shareholders”) entered into an amendment (as amended, the “Amendment to the Letter Agreement”) to that certain Letter Agreement, dated as of October 22, 2021, by and between the Initial Shareholders, pursuant to which, among other things, each of the Initial Shareholders agreed (i) not to transfer his, her or its ESGEN Class B ordinary shares (or the ESGEN Class A Common Stock issuable in exchange for such ESGEN Class B ordinary shares pursuant to the Business Combination Agreement) prior to the earlier of (A) six months after the Closing or (B) subsequent to the Closing (x) if the last sale price of the ESGEN Class A Common Stock quoted on Nasdaq is greater than or equal to $12 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-consecutive trading day period commencing at least 90 days after Closing, or (y) the date on which ESGEN completes a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ESGEN Class A ordinary shares (including any shares of ESGEN Class A Common Stock issuable in exchange for such ESGEN Class A ordinary shares) for cash, securities or other property and (ii) each Initial Shareholder agreed to waive any adjustment to the conversion ratio set forth in the governing documents of ESGEN with respect to the ESGEN Class B ordinary shares prior to the earlier of the ESGEN Share Conversion or the Closing.

Critical Accounting Estimates

The preparation of these financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. We have not identified any critical accounting estimates.

Recent Accounting Pronouncements

Refer to Note 2 (“Significant Accounting Policies”) in the financial statements for the recent accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information otherwise required under this item. As of June 30, 2023, we were not subject to any market or interest rate risk. The net proceeds of the Public Offering, including amounts in the Trust Account, were invested in U.S. government securities with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, that invest only in direct U.S. government treasury obligations. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

We have not engaged in any hedging activities since our inception, and we do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.

 

26

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of June 30, 2023, pursuant to Rule 13a-15(b) under the Exchange Act and determined that our disclosures controls and procedures were not effective as the material weakness identified as of December 31, 2022 and detailed in our Annual Report on Form 10-K continues to exist as of June 30, 2023. A material weakness, as defined in the SEC regulations, 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 on Form 10-K for the year ended December 31, 2022, our disclosure controls and procedures were not effective because of the identification of a material weakness in our internal control over financial reporting. We identified material weaknesses in our internal control over financial reporting, specifically, we did not design and maintain an effective control environment to prevent or detect material misstatements to the financial statements. Specifically, we lacked a sufficient complement of personnel with an appropriate level of internal controls and accounting knowledge, training and experience commensurate with our financial reporting requirements. Specifically, management did not design and maintain effective controls over the calculation of earnings per share and classification of the reinvestment of interest and dividend income in the Trust Account in the statement of cash flows.

Remediation Plan

Management plans to remediate the material weakness identified above by enhancing our processes to identify and appropriately apply applicable accounting requirements and increased communication among our personnel and third-party professionals with whom we consult regarding accounting applications. 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.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in Internal Control over Financial Reporting

Other than the remediation plan described above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors.

As of the date of this Quarterly Report, except as described below, there have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K as filed with the SEC on March 31, 2023 (the “Annual Report”).

 

27

There are no assurances that the approval of the Charter Amendment or the execution of the Business Combination Agreement will enable us to complete our proposed Business Combination.

In connection with the Charter Amendment, our Amended and Restated Memorandum and Articles of Association were amended to, among other things, (i) extend the date by which the Company must consummate its initial business combination from January 22, 2023 to the Extended Date and (ii) in the event that the Company has not consummated an initial business combination by the Extended Date, to allow the Company, by resolution of the Board and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to the Extended Date, to extend the Extended Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination), provided that the Lenders will deposit into the Trust Account for each Additional Extension Date the lesser of (a) US $140,000 or (b) $0.04 for each Public Share that is then-outstanding, in exchange for one or more non-interest bearing, unsecured promissory notes issued by the Company to the Lender. The purpose of the Charter Amendment is to allow the Company more time to complete its initial business combination and reduce the amount of funds to be deposited in the Trust Account to secure the extension.

Even though such extension was approved by our shareholders, the Company can provide no assurances that we will be able to complete our proposed Business Combination prior to the final Additional Extension Date. Our ability to consummate the Business Combination is dependent on a variety of factors, many of which are beyond our control. Additionally, we will be required to offer stockholders redemption rights again in connection with any stockholder vote to approve our proposed Business Combination. Other than in connection with a redemption offer or liquidation, our stockholders may be unable to recover their investment except through sales of our shares on the open market. The price of our shares may be volatile, and there can be no assurance that stockholders will be able to dispose of our shares at favorable prices, or at all.

We and our proposed target pursuant to the Business Combination Agreement will incur significant transaction and transition costs in connection with the proposed Business Combination.

We and our proposed target pursuant to the Business Combination Agreement expect to incur significant, non-recurring costs in connection with consummating the Business Combination and operating as a public company following the consummation of the Business Combination. We and such company may also incur additional costs to retain key employees. We will incur and be responsible for the expenses and fees as set forth in, and in connection with, the Business Combination Agreement. There can be no assurance that such fees and expenses will not be greater than expected or that there will be no unexpected costs related to the Business Combination.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

 

28

Item 6. Exhibits

 

Exhibit

No.

    Description
  2.1†    Business Combination Agreement, dated as of April 19, 2023, by and among ESGEN, Sunergy, the Sellers, OpCo, the Sponsor and Timothy Bridgewater (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2023)
  3.1    Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on October 25, 2021)
  3.2    Amendment to the Amended and Restated Articles of Association (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on January 20, 2023)
10.1   

Promissory Note in favor of ESGEN LLC, dated April 5, 2023 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 7, 2023)

10.2    Amendment to Letter Agreement, dated as of April 19, 2023, by and among ESGEN, the Sponsor and the Insiders party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April 20, 2023)
10.3    Initial Subscription Agreement, dated as of April 19, 2023, by and between ESGEN and the Sponsor (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 20, 2023)
31.1*    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
31.2*    Certification of Principal Financial 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
32.1**    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
32.2**    Certification of Principal Financial 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.SCH    Inline XBRL Taxonomy Extension Schema Document
101.CAL    Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF    Inline XBRL Taxonomy Extension Definition Document
101.LAB    Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE    Inline XBRL Taxonomy Extension Presentation Linkbase Document
EX-104    Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

*

Filed herewith.

**

Furnished herewith.

†

Certain of the schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish supplementally a copy of all omitted exhibits and schedules to the SEC upon its request.

 

29

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.

 

Date: August 14, 2023     ESGEN Acquisition Corporation
    By:  

/s/ Andrea Bernatova

      Andrea Bernatova
      Chief Executive Officer
Date: August 14, 2023     ESGEN Acquisition Corporation
    By:  

/s/ Nader Daylami

      Nader Daylami
      Chief Financial Officer

 

30

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrea Bernatova, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of ESGEN Acquisition Corporation;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 14, 2023

 

By:  

/s/ Andrea Bernatova

Name:   Andrea Bernatova
Title:  

Chief Executive Officer

(Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nader Daylami, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 of ESGEN Acquisition Corporation:

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

 

  a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: August 14, 2023

 

By:  

/s/ Nader Daylami

Name:   Nader Daylami
Title:  

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ESGEN Acquisition Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrea Bernatova, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023

 

By:  

/s/ Andrea Bernatova

Name:   Andrea Bernatova
Title:  

Chief Executive Officer

(Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ESGEN Acquisition Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nader Daylami, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023

 

By:  

/s/ Nader Daylami

Name:   Nader Daylami
Title:  

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

v3.23.2
Cover Page - shares
 6 Months Ended
Jun. 30, 2023
Aug. 14, 2023
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2023  
Entity File Number 001-40927  
Entity Registrant Name ESGEN Acquisition Corporation  
Entity Incorporation, State or Country Code E9  
Entity Tax Identification Number 98-1601409  
Entity Address, Address Line One 5956 Sherry Lane  
Entity Address, Address Line Two Suite 1400  
Entity Address, City or Town Dallas  
Entity Address, State or Province TX  
Entity Address, Postal Zip Code 75225  
City Area Code 214  
Local Phone Number 987-6100  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company true  
Entity Central Index Key 0001865506  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Class A common stock [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   2,896,555
Title of 12(b) Security Class A ordinary shares included as part of the units  
Trading Symbol ESAC  
Security Exchange Name NASDAQ  
Class B Common Stock [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   6,900,000
Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant [Member]    
Document Information [Line Items]    
Title of 12(b) Security Units, each consisting of one Class A ordinary share, $0.0001 par value, and one-half of one redeemable warrant  
Trading Symbol ESACU  
Security Exchange Name NASDAQ  
Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50[Member]    
Document Information [Line Items]    
Title of 12(b) Security Warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50  
Trading Symbol ESACW  
Security Exchange Name NASDAQ  
v3.23.2
Condensed Balance Sheets - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Current assets:    
Cash $ 50,193 $ 614,767
Prepaid expenses 13,627 31,110
Total current assets 63,820 645,877
Non-current assets:    
Marketable securities held in Trust Account 31,631,853 285,506,568
Total Assets 31,695,673 286,152,445
Current liabilities:    
Accounts payable and accrued expenses 4,664,539 1,866,992
Due to related party 279,193 144,193
Promissory note—related party 687,208 171,346
Total current liabilities 5,630,940 2,182,531
Non-current liabilities:    
Warrant Liabilities 2,049,024 796,224
Deferred underwriters' fee 0 9,660,000
Total Liabilities 7,679,964 12,638,755
Commitments and Contingencies
Class A ordinary shares subject to possible redemption, $0.0001 par value; 2,896,555 and 27,600,000 shares at redemption value as of June 30, 2023 and December 31, 2022, respectively 31,631,853 285,506,568
Shareholders' Deficit:    
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding 0 0
Accumulated deficit (7,616,834) (11,993,568)
Total shareholders' deficit (7,616,144) (11,992,878)
Total Liabilities, Redeemable Ordinary Shares and Shareholders' Deficit 31,695,673 286,152,445
Class A common stock [Member]    
Shareholders' Deficit:    
Common stock 0 0
Class B Common Stock [Member]    
Shareholders' Deficit:    
Common stock $ 690 $ 690
v3.23.2
Condensed Balance Sheets (Parenthetical) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Preferred stock, par value, (per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Class A common stock [Member]    
Temporary equity, par value, (per share) $ 0.0001 $ 0.0001
Temporary equity, shares outstanding 2,896,555 27,600,000
Common shares, par value, (per share) $ 0.0001 $ 0.0001
Common shares, shares authorized 250,000,000 250,000,000
Common shares, shares issued 0 0
Common shares, shares outstanding 0 0
Class B Common Stock [Member]    
Common shares, par value, (per share) $ 0.0001 $ 0.0001
Common shares, shares authorized 25,000,000 25,000,000
Common shares, shares issued 6,900,000 6,900,000
Common shares, shares outstanding 6,900,000 6,900,000
v3.23.2
Condensed Statements of Operations - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Legal and professional fees $ 1,675,962 $ 160,057 $ 3,044,803 $ 791,522
Insurance 6,036 131,853 22,566 262,257
Other operating costs 110,714 79,833 207,924 160,954
Operating cost—related party 30,000 30,000 60,000 60,000
Loss from operations (1,822,712) (401,743) (3,335,293) (1,274,733)
Other income (expense):        
Interest income on marketable securities held in Trust Account 365,224 368,774 1,305,870 386,945
Recovery of offering costs allocated to warrants 425,040 0 425,040 0
Change in fair value of warrant liabilities (378,624) 1,527,600 (1,252,800) 8,262,960
Total other income, net 411,640 1,896,374 478,110 8,649,905
Net (loss) income $ (1,411,072) $ 1,494,631 $ (2,857,183) $ 7,375,172
Class A common stock [Member]        
Other income (expense):        
Weighted Average Number of Shares Outstanding, Basic 2,896,555 27,600,000 5,489,734 27,600,000
Weighted Average Number of Shares Outstanding, Diluted 2,896,555 27,600,000 5,489,734 27,600,000
Basic net income per share $ (2.21) $ 0.05 $ (0.97) $ 0.22
Diluted net income per share $ (2.21) $ 0.05 $ (0.97) $ 0.22
Class B Common Stock [Member]        
Other income (expense):        
Weighted Average Number of Shares Outstanding, Basic 6,900,000 6,900,000 6,900,000 6,900,000
Weighted Average Number of Shares Outstanding, Diluted 6,900,000 6,900,000 6,900,000 6,900,000
Basic net income per share $ 0.72 $ 0.03 $ 0.36 $ 0.2
Diluted net income per share $ 0.72 $ 0.03 $ 0.36 $ 0.2
v3.23.2
Condensed Statements of Changes in Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit - USD ($)
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Class A common stock [Member]
Common Stock [Member]
Class B Common Stock [Member]
Common Stock [Member]
Balance at the beginning at Dec. 31, 2021 $ (22,340,560)   $ 0 $ (22,341,250) $ 281,520,000 $ 690
Balance at the beginning (in shares) at Dec. 31, 2021         27,600,000 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Accretion of ordinary shares subject to possible redemption (20,308)     (20,308) $ 20,308  
Net income (loss) 5,880,541     5,880,541    
Balance at the end at Mar. 31, 2022 (16,480,327)   0 (16,481,017) $ 281,540,308 $ 690
Balance at the end (in shares) at Mar. 31, 2022         27,600,000 6,900,000
Balance at the beginning at Dec. 31, 2021 (22,340,560)   0 (22,341,250) $ 281,520,000 $ 690
Balance at the beginning (in shares) at Dec. 31, 2021         27,600,000 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income (loss) 7,375,172 $ 7,375,172        
Balance at the end at Jun. 30, 2022 (15,354,470)   0 (15,355,160) $ 281,909,082 $ 690
Balance at the end (in shares) at Jun. 30, 2022         27,600,000 6,900,000
Balance at the beginning at Mar. 31, 2022 (16,480,327)   0 (16,481,017) $ 281,540,308 $ 690
Balance at the beginning (in shares) at Mar. 31, 2022         27,600,000 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Accretion of ordinary shares subject to possible redemption (368,774)     (368,774) $ 368,774  
Net income (loss) 1,494,631 1,494,631   1,494,631    
Balance at the end at Jun. 30, 2022 (15,354,470)   0 (15,355,160) $ 281,909,082 $ 690
Balance at the end (in shares) at Jun. 30, 2022         27,600,000 6,900,000
Balance at the beginning at Dec. 31, 2022 (11,992,878)   0 (11,993,568) $ 285,506,568 $ 690
Balance at the beginning (in shares) at Dec. 31, 2022         27,600,000 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Accretion of ordinary shares subject to possible redemption (1,288,233)     (1,288,233) $ 1,288,233  
Redemption of Class A ordinary shares subject to possible redemption         $ (255,875,758)  
Redemption of Class A ordinary shares subject to possible redemption (in shares)         (24,703,445)  
Net income (loss) (1,446,111)     (1,446,111)    
Balance at the end at Mar. 31, 2023 (14,727,222)   0 (14,727,912) $ 30,919,043 $ 690
Balance at the end (in shares) at Mar. 31, 2023         2,896,555 6,900,000
Balance at the beginning at Dec. 31, 2022 (11,992,878)   0 (11,993,568) $ 285,506,568 $ 690
Balance at the beginning (in shares) at Dec. 31, 2022         27,600,000 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Waiver of Deferred Underwriters' Fee 9,234,960          
Net income (loss) (2,857,183) (2,857,183)        
Balance at the end at Jun. 30, 2023 (7,616,144)   0 (7,616,834) $ 31,631,853 $ 690
Balance at the end (in shares) at Jun. 30, 2023         2,896,555 6,900,000
Balance at the beginning at Mar. 31, 2023 (14,727,222)   0 (14,727,912) $ 30,919,043 $ 690
Balance at the beginning (in shares) at Mar. 31, 2023         2,896,555 6,900,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Accretion of ordinary shares subject to possible redemption (712,810)     (712,810) $ 712,810  
Waiver of Deferred Underwriters' Fee 9,234,960     9,234,960    
Net income (loss) (1,411,072) $ (1,411,072)   (1,411,072)    
Balance at the end at Jun. 30, 2023 $ (7,616,144)   $ 0 $ (7,616,834) $ 31,631,853 $ 690
Balance at the end (in shares) at Jun. 30, 2023         2,896,555 6,900,000
v3.23.2
Condensed Statements of Cash Flows - USD ($)
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Cash flows from Operating Activities:    
Net (loss) income $ (2,857,183) $ 7,375,172
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:    
Interest earned on cash held in Trust Account 0 (386,945)
Recovery of offering costs allocated to warrants (425,040) 0
Change in fair value of warrant liabilities 1,252,800 (8,262,960)
Changes in current assets and liabilities:    
Prepaid expenses 17,483 253,918
Due to related party 135,000 60,000
Accounts payable and accrued expenses 2,797,547 584,389
Net cash provided by (used in) operating activities 920,607 (376,426)
Cash flows from investing activities:    
Reinvestment of marketable securities held in Trust Account (1,305,870) 0
Extension funding of Trust Account (695,173) 0
Cash withdrawn from Trust Account in connection with redemption 255,875,758 0
Net cash provided by investing activities 253,874,715 0
Cash flows from financing activities:    
Redemption of Class A common stock subject to possible redemption (255,875,758) 0
Proceeds from note payable-related party 515,862 0
Net cash used in financing activities (255,359,896) 0
Net change in cash (564,574) (376,426)
Cash, beginning of the period 614,767 1,323,903
Cash, end of the period 50,193 947,477
Supplemental disclosure of cash flow information:    
Change in value of Class A ordinary shares subject to possible redemption 2,001,043 389,082
Impact of the waiver of deferred commission by the underwriters $ 9,234,960 $ 0
v3.23.2
Organization and Business Operation
 6 Months Ended
Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Business Operation
Note 1 — Organization and Business Operation
ESGEN Acquisition Corporation (the “Company”) was incorporated as a Cayman Islands exempted company on April 19, 2021. The Company was incorporated 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”). The Company will not be limited to a particular industry or geographic region in its identification and acquisition of a target company.
As of June 30, 2023, the Company had not commenced any operations. All activity for the period from April 19, 2021 (inception) through June 30, 2023, relates to the Company’s formation and the initial public offering (“Public Offering” or “IPO”) described below and since the closing of the IPO, the search for a prospective initial business combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate
non-operating
income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering (as defined below).
The Company’s sponsor is ESGEN LLC, a Delaware limited liability company (the “Sponsor”).
The registration statement for the Company’s IPO was declared effective on October 19, 2021. On October 22, 2021, the Company consummated its IPO of 27,600,000 units (the “Units” and, with respect to the ordinary shares included in the Units being offered, the “Public Shares”) at $10.00 per Unit and the sale of 14,040,000 warrants (the “Private Placement Warrants”) each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor that closed simultaneously with the Public Offering.
The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the net assets held in the Trust Account (as defined below) (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of signing a definitive agreement in connection with the initial Business Combination. However, the Company will complete the initial Business Combination only if the post-Business Combination company in which its public shareholders own shares will own or acquire 50% or more of the outstanding voting securities of the target or is otherwise not required to register as an investment company under the Investment Company Act (the “Investment Company Act”). There is no assurance that the Company will be able to complete a Business Combination successfully.
Following the closing of the IPO on October 22, 2021, $281,520,000 ($10.20 per Unit) from the net proceeds sold in the IPO, including proceeds of the sale of the Private Placement Warrants, was deposited in a trust account (“Trust Account”) and is only be invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule2a-7promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations.
Except with respect to interest or other income earned on the funds held in the Trust Account that may be released to the Company to pay its income taxes, if any, the amended and restated memorandum and articles of association, as discussed below and subject to the requirements of law and regulation, will provide that the proceeds from the Public Offering and the sale of the Private Placement Warrants held in the Trust Account will not be released from the Trust Account (1) to the Company, until the completion of the initial Business Combination, or (2) to the public shareholders, until the earliest of (a) the completion of the initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholders properly elected to redeem, subject to the limitations described herein, (b) the redemption of any public shares properly
tendered in connection with a shareholder vote to amend the amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company did not complete its initial Business Combination within 15 months (which was extended pursuant to shareholder approval of the Charter Amendment (as defined below)) from the closing of this offering (the “Combination Period”) or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares, and (c) the redemption of the public shares if the Company has not consummated the Business Combination within Combination Period, subject to applicable law. Public shareholders who redeem their Class A ordinary shares in connection with a shareholder vote described in clause (b) in the preceding sentence shall not be entitled to funds from the Trust Account upon the subsequent completion of an initial Business Combination or liquidation if the Company has not consummated an initial Business Combination within Combination Period, with respect to such Class A ordinary shares so redeemed.
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of the initial 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 proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement.
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A ordinary shares upon the completion of its initial Business Combination at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any, divided by the number of then-outstanding public shares, subject to the limitations described herein. The amount in the Trust Account is initially $10.20 per public share. The per share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters.
The ordinary shares subject to redemption were recorded at redemption value and classified as temporary equity upon the completion of the Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” 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, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company has until August 22, 2023, unless extended with the extension as described in the following paragraph below, to consummate the initial Business Combination. If the Company has not consummated the initial Business Combination within the Combination Period, the Company will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at
a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its income taxes, if any (less up to $100,000 of interest to pay winding up and 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); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its 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.
 
On January 18, 2023, the Company held an extraordinary general meeting of shareholders (the “Meeting”) to consider and vote upon, among other things, a proposal to amend the Company’s amended and restated memorandum and articles of association (the “Charter Amendment”) to (i) extend the date by which the Company must consummate its initial business combination (the “Termination Date”) from January 22, 2023 to April 22, 2023 and (ii) in the event that the Company has not consummated an initial business combination by April 22, 2023, to allow the Company, by resolution of the Company’s board of directors (the “Board”) and, without any approval of the Company’s shareholders, upon five days’ advance notice prior to each Additional Extension, to extend the Termination Date up to six times (with each such extension being upon five days’ advance notice), each by one additional month (for a total of up to six additional months to complete a business combination) (each, an “Additional Extension” and such date, an “Additional Extension Date”), provided that the Sponsor or the Sponsor’s affiliates or permitted designees will deposit into the Trust Account for each Additional Extension Date the lesser of (a) US$140,000 or (b) $0.04 for each Public Share that is then-outstanding, in exchange for one or more
non-interest
bearing, unsecured promissory notes issued by the Company to the Sponsor or the Sponsor’s affiliates or permitted designees (the “Lenders” and each a “Lender”). In connection with the vote to approve the Charter Amendment, the holders of 24,703,445 Class A ordinary shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.35 per share, for an aggregate redemption amount of approximately $255,875,758. The Company’s current Additional Extension Date as of the date hereof is August 22, 2023.
The Sponsor and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares; (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the public shares if the Company did not complete its initial Business Combination within 15 months from the closing of the Public Offering (which was extended pursuant to shareholder approval of the Charter Amendment) or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an initial business combination within Combination Period.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company (other than the Company’s independent registered public accounting firm), or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.00 per public share due to reductions in the value of the Trust Account, in each case net of the interest that may be withdrawn to pay the Company’s income tax obligations, provided that such liability will not apply to any claims by a third party or prospective target business that executed a waiver of any and all rights to seek access to the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the 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. However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and the Company believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure you that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
 
Founder Shares
Founder Shares refers to the Class B ordinary shares (the “Founder Shares”) acquired by the initial shareholders prior to the Company’s IPO.
The initial shareholders and each member of the management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of the Business Combination; (ii) waive their redemption rights with respect to their Founder Shares and Public Shares in connection with a shareholder vote to approve an amendment to the amended and restated memorandum and articles of association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the Business Combination or to redeem 100% of the Company’s public shares if it does not complete the Business Combination by the Termination Date or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if the Company fails to consummate an Business Combination by the Termination Date (although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete the Business Combination within the prescribed time frame). If the Company seeks shareholder approval, it will complete the Business Combination only if it is approved by an ordinary resolution or such higher approval threshold as may be required by Cayman Islands law and pursuant to the amended and restated memorandum and articles of association. In such case, the initial shareholders and each member of the management team have agreed to vote their Founder Shares and Public Shares in favor of the Business Combination.
Risks and Uncertainties
The credit and financial markets have experienced extreme volatility and disruptions due to the current conflict between Ukraine and Russia. The conflict is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
Going Concern
As of June 30, 2023, the Company had $50,193 in cash held outside of the Trust Account and owes $4,664,539 in accounts payable and accrued expenses and an additional $966,401 to related parties. The Company anticipates that the cash held outside of the Trust Account as of June 30, 2023 will not be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. The Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans.
In connection with the Company’s assessment of going concern considerations in accordance with ASC Subtopic
205-40,
“Presentation of Financial Statements – Going Concern”, the Company has until August 22, 2023 (unless extended as described above) to consummate a Business Combination. If a Business Combination is not consummated by this date and an Additional Extension not obtained, there will be a mandatory liquidation and subsequent dissolution of the Company. It is uncertain whether the Company will be able to consummate a Business Combination by this time. Management has determined that the mandatory liquidation, should a Business Combination not occur, and an extension is not obtained, as well as the potential for us to have insufficient funds available to operate our business prior to a Business Combination, raises substantial doubt about the Company’s ability to continue as a going concern.
 
v3.23.2
Significant Accounting Policies
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Significant Accounting Policies
Note 2 — Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Qand
Article 8 of Regulation
S-X
of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K,
which contains the initial audited financial statements and notes thereto for the period ended December 31, 2022, as filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future interim periods.
The breakout of loss from operations on the condensed statement of operations for the three and six months ended June 30, 2022, has been revised to conform to the current presentation. This presentation did not impact any other financial statement line items.
Emerging Growth Company Status
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.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the 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. Accordingly, the actual results could differ significantly from those estimates.
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 June 30, 2023 and December 31, 2022, respectively.
Marketable Securities Held in Trust Account
Substantially all of the assets held in the Trust Account were held in U.S. Money Market Funds. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on marketable securities held in Trust Account in the accompanying statement
s
of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
Fair Value Measurement
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. The Company’s derivative instruments are recorded at fair value on the balance sheet with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheets as current or
non-current
based on whether or not
net-cash
settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Warrant Liability
The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC Topic 815-40 and ASC Topic 480. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This
liability is subject to
re-measurement
at each balance sheet date. With each
such
re-measurement,
the
warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
Net (Loss) Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per ordinary share is calculated by dividing the net (loss) income by the weighted average ordinary shares outstanding for the respective period. With respect to the accretion of Class A ordinary shares subject to possible redemption, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net (loss) income per ordinary share.
The earnings per share presented in the statement of operations is based on the following:

 
 
  
For the Three Months Ended
June 30,
 
 
For the Six Months Ended
June 30,
 
 
  
2023
 
 
2022
 
 
2023
 
 
2022
 
Net (loss) income
    $ (1,411,072 )    $ 1,494,631     $ (2,857,183 )    $ 7,375,172  
Accretion of temporary equity to redemption value
      8,522,150       (368,774 )      7,233,917       (386,945 ) 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income including accretion of temporary equity to redemption value
    $ 7,111,078     $ 1,125,857     $ 4,376,734     $ 6,988,227  
    
 
 
    
 
 
    
 
 
    
 
 
  
   
    
For the Three Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net income including accretion of temporary equity
    $ 2,133,323     $ 4,977,755     $ 900,686     $ 225,171  
Allocation of accretion of temporary equity to redemption value
      (8,522,150 )     —         368,774       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (6,388,827 )   $ 4,977,755     $ 1,269,460     $ 225,171  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      2,896,555       6,900,000       27,600,000       6,900,000  
Basic and diluted net (loss) income per share
    $ (2.21
)

   $ 0.72     $ 0.05     $ 0.03  
   
    
For the Six Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net (loss) income including accretion of temporary equity
    $ 1,925,763     $ 2,450,971     $ 5,590,582     $ 1,397,645  
Allocation of accretion of temporary equity to redemption value
      (7,233,917 )     —         386,945       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (5,308,154 )    $ 2,450,971     $ 5,977,527     $ 1,397,645  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      5,489,734       6,900,000       27,600,000
    6,900,000  
Basic and diluted net (loss) income per share
    $ (0.97 )    $ 0.36     $ 0.22
  $ 0.20  

Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation of diluted loss per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
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. Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.
The Company has made a policy election in accordance with
ASC 480-10-S99-3A
and will recognize changes in redemption value in additional
paid-in
capital (or accumulated deficit in the absence of additional
paid-in
capital) immediately as they occur. The Company recorded accretion of $712,810 and $2,001,043 in accumulated deficit for three and six months ended June 30, 2023, respectively, and $368,774 and $389,082 in accumulated deficit for the three and six months ended June 30, 2022, respectively. For the period ended June 30, 2023, the Company recorded redemption of $255,875,758 and $695,173 was deposited in the Trust Account for extension funding.
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes” (“ASC 740”).
ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2023 and December 31, 2022.
The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
v3.23.2
Related Party Transactions
 6 Months Ended
Jun. 30, 2023
Related Party Transactions [Abstract]  
Related Party Transactions
Note 3 — Related Party Transactions
Promissory Notes — Related Party
On April 27, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Public Offering. The Company borrowed a total of $262,268. This loan was
non-interest
bearing, unsecured and due at the earlier of December 31, 2021 or the closing of the Public Offering. The loan was to be repaid upon the closing of the Public Offering out of the offering proceeds not held in the Trust Account. In connection with the closing of the Public Offering, the Company paid down $90,922 of the outstanding balance. As of June 30, 2023 and December 31, 2022, the Company had $171,346 outstanding under the promissory note. The Sponsor has agreed to defer repayment of the loan until the close of the Business Combination, respectively.
On April 5, 2023, the Company issued an unsecured promissory note (the “Note”) in the principal amount of up to $1,500,000 to the Sponsor, which may be drawn down by the Company from time to time prior to the consummation of the Company’s Business Combination. The Note does not bear interest, matures on the date of consummation of the Business Combination and is subject to customary events of default. As of June 30, 2023, the Company had $515,862 outstanding under the Note.
Working Capital Loans
In order to finance transaction costs in connection with an intended Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes the initial Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay the Working Capital Loans but no proceeds from the Trust Account would be used to repay the Working Capital Loans. Up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post-Business Combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants. As of June 30, 2023 and December 31, 2022, the Company had no borrowings under the Working Capital Loans.
Office Space, Secretarial and Administrative Services
Through the earlier of consummation of the initial Business Combination and the liquidation, the Company incurs $10,000 per month for office space, utilities, secretarial support and administrative services provided by the Sponsor.
 
For the three and six months ended June 30, 2023 and 2022, the Company has incurred
$30,000 and $60,000, 
respectively. No amounts have been paid for these services. As of June 30, 2023 and December 31, 2022, the Company reported on the balance sheets
 $135,000 and $120,000, respectively, pursuant to this agreement, in “Due to related party”.
v3.23.2
Prepaid Expenses
 6 Months Ended
Jun. 30, 2023
Prepaid Expense, Current [Abstract]  
Prepaid Expenses
Note 4 — Prepaid Expenses
The Company’s prepaid expenses as of June 30, 2023 and December 31, 2022 primarily consisted of insurance.
 

 
  
June 30, 2023
 
  
December 31, 2022
 
Prepaid insurance
    $ 3,515      $ 26,081  
Other prepaid expenses
      10,112        5,029  
    
 
 
     
 
 
  
    
$
13,627
 
   
$
31,110
 
    
 
 
     
 
 
  
v3.23.2
Accounts Payable and Accrued Expenses
 6 Months Ended
Jun. 30, 2023
Accounts Payable and Accrued Liabilities, Current [Abstract]  
Accounts Payable and Accrued Expenses
Note 5 — Accounts Payable and Accrued Expenses
The Company’s accounts payable and accrued expenses as of June 30, 2023 and December 31, 2022 primarily consisted of legal accruals.
 
 
  
June 30, 2023
 
  
December 31, 2022
 
Legal accrual
  
$
4,435,086
 
  
$
1,705,049
 
Other payables and expenses
  
 
229,453
 
  
 
161,943
 
  
 
 
 
  
 
 
 
  
$
4,664,539
 
  
$
1,866,992
 
  
 
 
 
  
 
 
 
v3.23.2
Commitments & Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments & Contingencies
Note 6 — Commitments & Contingencies
Registration and Shareholder Rights
The holders of the 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 Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of its initial Business Combination. However, the registration and expected shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable
lock-up
period, which occurs (i) in the case of the Founder Shares, and (ii) in the case of the private placement warrants and the respective Class A ordinary shares issuable upon exercise of the private placement warrants, 30 days after the completion of the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements. The holders of the 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 Working Capital Loans and warrants that may be issued upon conversion of Working Capital Loans) will be entitled to registration rights pursuant to a registration and expected shareholder rights agreement signed at the closing of our Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company’s register such securities.
In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of its initial Business Combination. However, the registration and expected shareholder rights agreement provides that the Company 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, as described in the following paragraph, 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 the initial Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Except as described herein, the Sponsor and its directors and executive officers have agreed not to transfer, assign or sell any of their Founder Shares until the earliest of (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the closing price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any30-tradingday period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company complete a liquidation, merger, share exchange or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the Sponsor and its directors and executive officers with respect to any founder shares. Any permitted transferees will be subject to
the same restrictions and other agreements of the Sponsor with respect to any Founder Shares. The Company refers to such transfer restrictions throughout the Public Offering as the lock- up.
In addition, pursuant to the registration and expected shareholder rights agreement, the Sponsor, upon and following consummation of an initial Business Combination, will be entitled to nominate three individuals for election to the board of directors, as long as the Sponsor holds any securities covered by the registration and expected shareholder rights agreement.
Underwriting Agreement
The underwriters were entitled to a deferred underwriting commission of 3.5% of the gross proceeds of the Public Offering upon the completion of the Company’s initial Business Combination. In April 2023, t
he
 
underwriters waived any right to receive the deferred underwriting commission and will therefore receive no additional underwriting commissions in connection with the Closing. As a result, the Company recognized $
425,040
of income and $
9,234,960
was recorded to accumulated deficit in relation to the reduction of the deferred underwriter fee. As of June 30, 2023 and December 31, 2022, the deferred underwriting fee is $
0
and $
9,660,000
, respectively.

To account for the waiver of the deferred underwriting fee, the Company analogized to the SEC staff’s guidance on accounting for reducing a liability for “trailing fees”. Upon the waiver of the deferred underwriter fee, the Company reduced the deferred underwriter liability to $0 and reversed the previously recorded cost of issuing the instruments in the IPO, which included recognizing a contra-expense of $425,040, which is the amount previously allocated to liability classified warrants and expensed upon the IPO, and reduced the accumulated deficit and increased income available to Class B ordinary shares by $9,234,960, which was previously allocated to the Class A ordinary shares subject to redemption and accretion recognized at the IPO date.
Proposed Business Combination
On April 19, 2023, the Company entered into a Business Combination Agreement, by and among the Company, ESGEN OpCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of ESGEN (“OpCo”), Sunergy Renewables, LLC, a Nevada limited liability company (“Sunergy”), the Sunergy equityholders set forth on the signature pages thereto (collectively, “Sellers” and each, a “Seller”, and collectively with Sunergy, the “Sunergy Parties”), for limited purposes, the Sponsor, and for limited purposes, Timothy Bridgewater, an individual, in his capacity as the Sellers Representative (the “Business Combination Agreement”).
In accordance with the terms and subject to the conditions of the Business Combination Agreement, among other things: (i) prior to the consummation of the Business Combination (the “Closing”), each issued and outstanding Class B ordinary share, par value $0.0001 per share, of ESGEN will convert into one ESGEN Class A ordinary share, par value $0.0001 per share, of ESGEN (the “ESGEN Share Conversion”); and (ii) following the ESGEN Share Conversion but prior to the Closing, ESGEN will, subject to the receipt of the requisite shareholder approval, transfer by way of continuation from the Cayman Islands to the State of Delaware and domesticate as a Delaware corporation (the “Domestication”).
In connection with the Domestication, (A) each outstanding ESGEN Class A Ordinary Share will become one share of Class A common stock, par value $0.0001 per share, of ESGEN, (B) each outstanding warrant to purchase one ESGEN Class A Ordinary Share will become a warrant to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share, and (C) ESGEN will file its certificate of incorporation and will adopt bylaws to serve as its governing documents upon consummation of the Domestication. In connection with the ESGEN Share Conversion and the Domestication, each issued and outstanding unit of ESGEN, each consisting of ESGEN Class A Ordinary Share and
one-half
of one warrant to purchase one ESGEN Class A Ordinary Share (each, an “ESGEN Unit”), that has not been previously separated into the underlying ESGEN Class A Ordinary Shares and underlying ESGEN Warrants prior to the Domestication will be cancelled and will entitle the holder thereof to (x) one share of ESGEN Class A Common Stock and
(y) 
one-half of one

warrant representing the right to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share on the terms and subject to the conditions applicable to ESGEN Warrants set forth in the Warrant Agreement, dated as of October 22, 2021, between ESGEN and Continental Stock Transfer & Trust Company (the “Trustee”).
In accordance with the terms and subject to the conditions of the Business Combination Agreement, Sunergy will cause all holders of any options, warrants or rights to subscribe for or purchase any equity interests of Sunergy or its subsidiaries or securities (including debt securities) convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire, any equity interests of Sunergy or any subsidiary thereof (collectively, the “Sunergy Convertible Interests”) existing immediately prior to the Closing either to exchange or convert all such holder’s Sunergy Convertible Interests into limited liability interests of Sunergy (the “Sunergy Company Interests”) in accordance with the governing documents of Sunergy or the Sunergy Convertible Interests (collectively, the “Sunergy Exchanges”).
At the Closing, ESGEN will contribute to OpCo (1) all of its assets (excluding its interests in OpCo, but including the amount of cash in the Trust Account as of immediately prior to the Closing (after giving effect to the exercise of redemption rights by any ESGEN shareholders)), and (2) a number of newly issued shares of Class V common stock of ESGEN, par value $0.0001 per share, which will generally have only voting rights (the “ESGEN Class V Common Stock”), equal to the number of Seller OpCo Units (as defined in the Business Combination Agreement) (the “Seller Class V Shares”) and (y) in exchange, OpCo shall issue to ESGEN (i) a number of common units of OpCo (the “OpCo Units”) which shall equal the number of total shares of ESGEN Class A Common Stock issued and outstanding immediately after the Closing and (ii) a number of warrants to purchase OpCo Units which shall equal the number of SPAC Warrants issued and outstanding immediately after the Closing (the transactions described above in this paragraph, the “ESGEN Contribution”). Immediately following the ESGEN Contribution, (x) the Sellers will contribute to OpCo the Sunergy Company Interests and (y) in exchange therefor, OpCo will transfer to the Sellers the Seller OpCo Units and the Seller Class V Shares.
The obligation of ESGEN, the Sunergy Parties and OpCo to consummate the Business Combination is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any order, law or other legal restraint or prohibition enacted, issued or promulgated by any court of competent jurisdiction or other governmental entity of competent jurisdiction having the effect of making the Business Combination illegal or otherwise prohibiting the consummation of the Business Combination, (ii) the termination or expiration of any applicable waiting period applicable to the consummation of the Business Combination under the Hart-Scott-Rodino Act, (iii) the effectiveness of the Registration Statement on Form
S-4
(the “Registration Statement”) in accordance with the provisions of the Securities Act, registering the ESGEN Class A Common Stock to be issued in connection with the Business Combination Agreement, (iv) receipt of the required approvals of ESGEN’s shareholders at a meeting of the shareholders of ESGEN in connection with the Business Combination, (v) the ESGEN Class A Common Stock to be issued in connection with the Business Combination immediately after Closing shall be listed on Nasdaq and ESGEN will be able to satisfy any continued listing requirements of Nasdaq immediately after Closing, (vi) if the ESGEN shareholders do not approve the Redemption Limitation Amendment (as defined in the Business Combination Agreement), ESGEN having at least $5,000,001 of net tangible assets (as determined in accordance with Rule
3a51-1(g)(1)
of the Exchange Act) remaining immediately after any holders of the ESGEN Class A Ordinary Shares exercise their redemption rights, (vii) the members of the post-Business Combination ESGEN board of directors shall have been elected or appointed in accordance with the Business Combination Agreement and (viii) the aggregate transaction proceeds, including from the Trust Account after giving effect to the exercise of redemption rights by any ESGEN shareholders pursuant to the ESGEN amended and restated memorandum and articles of association, as amended, and the proceeds resulting from the Initial PIPE Investment (as defined below) and any financing agreements executed in furtherance of the Business Combination Agreement, shall be greater or equal to $20.0 million.
Concurrently with the execution of the Business Combination Agreement, ESGEN entered into a subscription agreement (the “Initial Subscription Agreement”) with Sponsor. Pursuant to the Initial Subscription Agreement, Sponsor agreed to subscribe for and purchase, and ESGEN agreed to issue and sell to Sponsor, concurrently with
 
the Closing, an aggregate of 1,000,000 shares of ESGEN Class A Common Stock for a purchase price of $10.00 per share, for aggregate gross proceeds of $10,000,000 (the “Initial PIPE Investment”). The closing of the Initial PIPE Investment is contingent upon, among other things, the substantially concurrent consummation of the Business Combination. The Initial Subscription Agreement provides that ESGEN will grant Sponsor certain customary registration rights. In addition to the Initial PIPE Investment, under the Business Combination Agreement, ESGEN and Sunergy have agreed to use their reasonable best efforts to identify other investors to enter into equity financing agreements (the “Additional Financing Agreements” and, together with the Initial Subscription Agreement, the “Financing Agreements”), in form and substance reasonably acceptable to ESGEN and Sunergy, to support the transaction (such equity financing under the Financing Agreements, collectively, herein referred to as the “Private Placements”).
The Business Combination is expected to close in the fourth quarter of 2023, following the receipt of the required approvals by our shareholders and the fulfillment of other customary closing conditions.
v3.23.2
Warrant Liabilities
 6 Months Ended
Jun. 30, 2023
Warrant Liabilities  
Warrant Liabilities
Note
7
 — Warrant Liabilities
The Company accounts for the 27,840,000 warrants issued in connection with the Public Offering (13,800,000 Public Warrants and 14,040,000 Private Placement Warrants) in accordance with the guidance contained in ASC Topic
815-40.
Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company classifies each warrant as a liability at its fair value. This liability is subject to remeasurement at each balance sheet date.
With each such remeasurement, the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
Public Warrants
Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, 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, the $18.00 per share redemption trigger price described adjacent to “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price, and the $10.00 per share redemption trigger price described adjacent to the caption “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 the higher of the Market Value and the Newly Issued Price.
The warrants will become exercisable 30 days after the completion of the Company’s initial Business Combination and will expire five years after the completion of the Company’s initial Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.
The Company has agreed that as soon as practicable, but in no event later than 20 business days after the closing of the initial Business Combination, it will use its commercially reasonable efforts to file with the SEC a post-
 
effective amendment to the registration statement of which this prospectus forms a part or a new registration statement for the registration, under the Securities Act, of the Class A ordinary shares issuable upon exercise of the warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within 60 business days after the closing of the initial Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elect, it will not be required to file or maintain in effect a registration statement, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent. If a registration statement covering the Class A ordinary shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of Class A ordinary shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the number of Class A ordinary shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the Class A ordinary shares for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Redemption of warrants when the price per Class
 A ordinary share equals or exceeds $18.00.
Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants (except as described herein with respect to the Private Placement Warrants):
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per warrant;
 
  •  
upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within
a30-tradingday
period ending three trading days before the Company sends the notice of redemption to the warrant holders.
Redemption of warrants when the price per Class
 A ordinary share equals or exceeds $10.00.
Once the warrants become exercisable, the Company may redeem not less than all of the outstanding warrants:
 
  •  
in whole and not in part;
 
  •  
at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption; and
 
  •  
if, and only if, the closing price of the Class A ordinary shares equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “Description of Securities—Warrants—Public Shareholders’ Warrants—Anti-dilution Adjustments”) for any 20 trading days within the30-tradingday period ending three trading days before the Company sends the notice of redemption to the warrant holders;
 
Private Warrants
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in the Public Offering. Any amendment to the terms of the Private Placement Warrants or any provision of the warrant agreement with respect to the Private Placement Warrants will require a vote of holders of at least 50% of the number of the then outstanding Private Placement Warrants.
The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the closing of the IPO. Accordingly, the Company has classified each warrant as a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its fair value. This liability is subject to
re-measurement
at each balance sheet date. With each such
re-measurement,
the warrant liabilities will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.
v3.23.2
Recurring Fair Value Measurements
 6 Months Ended
Jun. 30, 2023
Derivative Instrument Detail [Abstract]  
Recurring Fair Value Measurements
Note
8
 — Recurring Fair Value Measurements
As of June 30, 2023 and December 31, 2022, investments held in the Trust Account are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets.
The Company’s Public Warrants are traded on the Nasdaq. As such, the Public Warrant valuation is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of the Public Warrant liabilities is classified within Level 1 of the fair value hierarchy.
At June 30, 2023 and December 31, 2022, the Company considers the Private Warrants to be economically equivalent to the Public Warrants. As such, the valuation of the Public Warrants was used to value the Private Warrants. The fair value of the Private Warrant liabilities is classified within Level 2 of the fair value hierarchy.
The following tables presents fair value information as of June 30, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
 
June 30, 2023
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
Assets:
  
  
  
  
Marketable securities held in Trust Account
    $ 31,631,853      $ —        $ —        $ 31,631,853  
Liabilities:
                                    
Public Warrants
      1,015,680        —          —          1,015,680  
Private Warrants
      —          1,033,344        —          1,033,344  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
966,000
 
   
$
982,800
 
   
$
—  
     
$
1,948,800
 
    
 
 
     
 
 
     
 
 
     
 
 
  
         
December 31, 2022
   
Level 1
     
Level 2
     
Level 3
     
Total
  
Assets:
                                    
Marketable securities held in Trust Account
    $ 285,506,568      $ —        $ —        $ 285,506,568  
Liabilities:
                                    
Public Warrants
      394,680        —          —          394,680  
Private Warrants
      —          401,544        —          401,544  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
394,680
 
   
$
401,544
 
   
$
—  
     
$
796,224
 
    
 
 
     
 
 
     
 
 
     
 
 
  
There were no transfers to or from Levels 1, 2 or 3.
v3.23.2
Shareholder's Equity (Deficit)
 6 Months Ended
Jun. 30, 2023
Stockholders' Equity Note [Abstract]  
Shareholder's Equity (Deficit)
Note
9
 — Shareholders’ Deficit
Preference shares
—The Company is authorized to issue 1,000,000 preference shares with a par value of $0.0001 and with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of June 30, 2023 and December 31, 2022, there were no preference shares issued or outstanding.
Class
 A ordinary shares
—The Company is authorized to issue 250,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of June 30, 2023 and December 31, 2022, there were no Class A ordinary shares issued or outstanding other than the 2,896,555 and 27,600,000 Class A ordinary shares subject to possible redemption that are accounted for outside of the shareholders’ deficit section of the condensed balance sheets, respectively.
Class
 B ordinary shares
—The Company is authorized to issue 25,000,000 Class B ordinary shares with a par value of $0.0001 per share. Holders are entitled to one vote for each share of Class B ordinary shares. As of June 30, 2023 and December 31, 2022, there were 6,900,000 Class B ordinary shares issued and outstanding.
Holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders except as required by law. Unless specified in the Company’s amended and restated memorandum and articles of association, or as required by applicable provisions of the Companies Act or applicable stock exchange rules, the affirmative vote of a majority of the Company’s ordinary shares that are voted is required to approve any such matter voted on by its shareholders.
The
 Class B ordinary shares will automatically convert into Class A ordinary shares (which such Class A ordinary shares delivered upon conversion will not have any redemption rights or be entitled to liquidating distributions from the Trust Account if the Company fails to consummate an initial Business Combination) 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 ordinary shares issued and outstanding upon completion of the 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 consummation of the initial Business Combination, 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, any of its affiliates or any members 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.

This
 is different than some other similarly structured blank check companies in which the initial shareholders will only be issued an aggregate of
20
% of the total number of shares to be outstanding prior to the initial Business Combination.
v3.23.2
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to
Form 10-Qand
Article 8 of Regulation
S-X
of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on
Form 10-K,
which contains the initial audited financial statements and notes thereto for the period ended December 31, 2022, as filed with the SEC on March 31, 2023. The interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023 or for any future interim periods.
The breakout of loss from operations on the condensed statement of operations for the three and six months ended June 30, 2022, has been revised to conform to the current presentation. This presentation did not impact any other financial statement line items.
Emerging Growth Company Status
Emerging Growth Company Status
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.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s unaudited condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the 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. Accordingly, the actual results could differ significantly from those estimates.
Cash Equivalents
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 June 30, 2023 and December 31, 2022, respectively.
Marketable Securities Held in Trust Account
Marketable Securities Held in Trust Account
Substantially all of the assets held in the Trust Account were held in U.S. Money Market Funds. The Company’s investments held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheet at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of investments held in Trust Account are included in investment income on marketable securities held in Trust Account in the accompanying statement
s
of operations. The estimated fair values of investments held in Trust Account are determined using available market information.
Fair Value Measurement
Fair Value Measurement
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term nature.
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The Company’s financial instruments are classified as either Level 1, Level 2 or Level 3. These tiers include:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
Derivative Financial Instruments
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. The Company’s derivative instruments are recorded at fair value on the balance sheet with changes in the fair value reported in the statements of operations. Derivative assets and liabilities are classified on the balance sheets as current or
non-current
based on whether or not
net-cash
settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Warrant Liability
Warrant Liability
The Company accounts for the Public and Private Placement warrants issued in connection with the Public Offering in accordance with the guidance contained in ASC Topic 815-40 and ASC Topic 480. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company will classify each warrant as a liability at its fair value. This
liability is subject to
re-measurement
at each balance sheet date. With each
such
re-measurement,
the
warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
Net (Loss) Income Per Ordinary Share
Net (Loss) Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net (loss) income per ordinary share is calculated by dividing the net (loss) income by the weighted average ordinary shares outstanding for the respective period. With respect to the accretion of Class A ordinary shares subject to possible redemption, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net (loss) income per ordinary share.
The earnings per share presented in the statement of operations is based on the following:

 
 
  
For the Three Months Ended
June 30,
 
 
For the Six Months Ended
June 30,
 
 
  
2023
 
 
2022
 
 
2023
 
 
2022
 
Net (loss) income
    $ (1,411,072 )    $ 1,494,631     $ (2,857,183 )    $ 7,375,172  
Accretion of temporary equity to redemption value
      8,522,150       (368,774 )      7,233,917       (386,945 ) 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income including accretion of temporary equity to redemption value
    $ 7,111,078     $ 1,125,857     $ 4,376,734     $ 6,988,227  
    
 
 
    
 
 
    
 
 
    
 
 
  
   
    
For the Three Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net income including accretion of temporary equity
    $ 2,133,323     $ 4,977,755     $ 900,686     $ 225,171  
Allocation of accretion of temporary equity to redemption value
      (8,522,150 )     —         368,774       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (6,388,827 )   $ 4,977,755     $ 1,269,460     $ 225,171  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      2,896,555       6,900,000       27,600,000       6,900,000  
Basic and diluted net (loss) income per share
    $ (2.21
)

   $ 0.72     $ 0.05     $ 0.03  
   
    
For the Six Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net (loss) income including accretion of temporary equity
    $ 1,925,763     $ 2,450,971     $ 5,590,582     $ 1,397,645  
Allocation of accretion of temporary equity to redemption value
      (7,233,917 )     —         386,945       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (5,308,154 )    $ 2,450,971     $ 5,977,527     $ 1,397,645  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      5,489,734       6,900,000       27,600,000
    6,900,000  
Basic and diluted net (loss) income per share
    $ (0.97 )    $ 0.36     $ 0.22
  $ 0.20  

Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation of diluted loss per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
Class A Ordinary Shares Subject to Possible Redemption
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. Class A ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including 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, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares sold in the IPO feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.
The Company has made a policy election in accordance with
ASC 480-10-S99-3A
and will recognize changes in redemption value in additional
paid-in
capital (or accumulated deficit in the absence of additional
paid-in
capital) immediately as they occur. The Company recorded accretion of $712,810 and $2,001,043 in accumulated deficit for three and six months ended June 30, 2023, respectively, and $368,774 and $389,082 in accumulated deficit for the three and six months ended June 30, 2022, respectively. For the period ended June 30, 2023, the Company recorded redemption of $255,875,758 and $695,173 was deposited in the Trust Account for extension funding.
Income Taxes
Income Taxes
The Company accounts for income taxes under ASC Topic 740, “Income Taxes” (“ASC 740”).
ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of June 30, 2023 and December 31, 2022.
The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s unaudited condensed financial statements. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2023 and December 31, 2022, there were no unrecognized tax benefits and no amounts were accrued for the payment of interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.
v3.23.2
Significant Accounting Policies (Tables)
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Schedule of compute basic and diluted net income per share
The earnings per share presented in the statement of operations is based on the following:

 
 
  
For the Three Months Ended
June 30,
 
 
For the Six Months Ended
June 30,
 
 
  
2023
 
 
2022
 
 
2023
 
 
2022
 
Net (loss) income
    $ (1,411,072 )    $ 1,494,631     $ (2,857,183 )    $ 7,375,172  
Accretion of temporary equity to redemption value
      8,522,150       (368,774 )      7,233,917       (386,945 ) 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income including accretion of temporary equity to redemption value
    $ 7,111,078     $ 1,125,857     $ 4,376,734     $ 6,988,227  
    
 
 
    
 
 
    
 
 
    
 
 
  
   
    
For the Three Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net income including accretion of temporary equity
    $ 2,133,323     $ 4,977,755     $ 900,686     $ 225,171  
Allocation of accretion of temporary equity to redemption value
      (8,522,150 )     —         368,774       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (6,388,827 )   $ 4,977,755     $ 1,269,460     $ 225,171  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      2,896,555       6,900,000       27,600,000       6,900,000  
Basic and diluted net (loss) income per share
    $ (2.21
)

   $ 0.72     $ 0.05     $ 0.03  
   
    
For the Six Months Ended

June 30,
  
    
2023
    
2022
  
    
Class A
    
Class B
    
Class A
    
Class B
  
Basic and diluted net (loss) income per share:
                                 
Numerator:
                                 
Allocation of net (loss) income including accretion of temporary equity
    $ 1,925,763     $ 2,450,971     $ 5,590,582     $ 1,397,645  
Allocation of accretion of temporary equity to redemption value
      (7,233,917 )     —         386,945       —    
    
 
 
    
 
 
    
 
 
    
 
 
  
Allocation of
net
(loss) income
    $ (5,308,154 )    $ 2,450,971     $ 5,977,527     $ 1,397,645  
    
 
 
    
 
 
    
 
 
    
 
 
  
Denominator:
                                 
Weighted-average shares outstanding
      5,489,734       6,900,000       27,600,000
    6,900,000  
Basic and diluted net (loss) income per share
    $ (0.97 )    $ 0.36     $ 0.22
  $ 0.20  

Net (loss) income per share is computed by dividing net (loss) income by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the 27,840,000 ordinary shares issuable upon exercise of the Public Warrants and Private Placement Warrants in the calculation of diluted loss per share, since the exercise of such warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
v3.23.2
Prepaid Expenses (Tables)
 6 Months Ended
Jun. 30, 2023
Prepaid Expense, Current [Abstract]  
Summary of Prepaid expenses
 
  
June 30, 2023
 
  
December 31, 2022
 
Prepaid insurance
    $ 3,515      $ 26,081  
Other prepaid expenses
      10,112        5,029  
    
 
 
     
 
 
  
    
$
13,627
 
   
$
31,110
 
    
 
 
     
 
 
  
v3.23.2
Accounts Payable and Accrued Expenses (Tables)
 6 Months Ended
Jun. 30, 2023
Accounts Payable and Accrued Liabilities, Current [Abstract]  
Schedule of company's accounts payable and accrued expenses
The Company’s accounts payable and accrued expenses as of June 30, 2023 and December 31, 2022 primarily consisted of legal accruals.
 
 
  
June 30, 2023
 
  
December 31, 2022
 
Legal accrual
  
$
4,435,086
 
  
$
1,705,049
 
Other payables and expenses
  
 
229,453
 
  
 
161,943
 
  
 
 
 
  
 
 
 
  
$
4,664,539
 
  
$
1,866,992
 
  
 
 
 
  
 
 
 
v3.23.2
Recurring Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2023
Derivative Instrument Detail [Abstract]  
Schedule of fair value hierarchy for liabilities measured at fair value on recurring basis
The following tables presents fair value information as of June 30, 2023 and December 31, 2022 of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
 
June 30, 2023
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
Assets:
  
  
  
  
Marketable securities held in Trust Account
    $ 31,631,853      $ —        $ —        $ 31,631,853  
Liabilities:
                                    
Public Warrants
      1,015,680        —          —          1,015,680  
Private Warrants
      —          1,033,344        —          1,033,344  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
966,000
 
   
$
982,800
 
   
$
—  
     
$
1,948,800
 
    
 
 
     
 
 
     
 
 
     
 
 
  
         
December 31, 2022
   
Level 1
     
Level 2
     
Level 3
     
Total
  
Assets:
                                    
Marketable securities held in Trust Account
    $ 285,506,568      $ —        $ —        $ 285,506,568  
Liabilities:
                                    
Public Warrants
      394,680        —          —          394,680  
Private Warrants
      —          401,544        —          401,544  
    
 
 
     
 
 
     
 
 
     
 
 
  
Total liabilities
   
$
394,680
 
   
$
401,544
 
   
$
—  
     
$
796,224
 
    
 
 
     
 
 
     
 
 
     
 
 
  
v3.23.2
Organization and Business Operation (Details) - USD ($)
 6 Months Ended
Jan. 18, 2023
Oct. 22, 2021
Jun. 30, 2023
Dec. 31, 2022
Subsidiary, Sale of Stock [Line Items]        
Shares Issued, Price Per Share     $ 10  
Net tangible assets     $ 5,000,001  
Condition for future business combination threshold Percentage Ownership     50  
Redemption of shares calculated based on business days prior to consummation of business combination     15 months  
Condition for future business combination threshold Net Tangible Assets     $ 100,000  
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent)     100.00%  
Cash held outside of the Trust Account $ 140,000   $ 50,193  
Accrued Offering Costs And Expenses     4,664,539  
Due to related party     $ 279,193 $ 144,193
Public share $ 0.04   $ 9.2  
Redemption Price Per Share $ 10.35      
Aggregate redemption amount $ 255,875,758      
Class A common stock [Member]        
Subsidiary, Sale of Stock [Line Items]        
Shares Issued, Price Per Share     10  
Stock issued during period, shares, new issues 24,703,445      
Initial Public Offering [Member]        
Subsidiary, Sale of Stock [Line Items]        
Sale of Units, net of underwriting discounts (in shares)   27,600,000    
Shares Issued, Price Per Share   $ 10.2 10  
Proceeds from Issuance Initial Public Offering   $ 281,520,000    
Initial Public Offering [Member] | Private Placement Warrants [Member]        
Subsidiary, Sale of Stock [Line Items]        
Shares Issued, Price Per Share   $ 11.5    
Sale of Private Placement Warrants (in shares)   14,040,000    
Price of warrant   $ 1    
Initial Public Offering [Member] | Public Warrants [Member]        
Subsidiary, Sale of Stock [Line Items]        
Shares Issued, Price Per Share     $ 10.2  
Private Placement [Member] | Private Placement Warrants [Member]        
Subsidiary, Sale of Stock [Line Items]        
Percentage of business combinations aggregate fair market value     80.00%  
Over-allotment option [Member]        
Subsidiary, Sale of Stock [Line Items]        
Shares Issued, Price Per Share   $ 10    
Sponsor [Member]        
Subsidiary, Sale of Stock [Line Items]        
Redemption of shares calculated based on business days prior to consummation of business combination     15 months  
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent)     100.00%  
Related Party [Member]        
Subsidiary, Sale of Stock [Line Items]        
Due to related party     $ 966,401  
v3.23.2
Significant Accounting Policies (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Cash and cash equivalents $ 0   $ 0   $ 0
Unrecognized tax benefits 0   0   0
Unrecognized tax benefits accrued for interest and penalties 0   $ 0   0
Anti-dilutive securities attributable to warrants (in shares)     27,840,000    
Accretion of carrying value to redemption value     $ 255,875,758    
Payments to Acquire Restricted Investments     695,173 $ 0  
Accumulated Deficit [Member]          
Accretion of carrying value to redemption value 712,810 $ 368,774 2,001,043 $ 389,082  
Class A common stock [Member] | Initial Public Offering [Member]          
Unrecognized tax benefits $ 0   $ 0   $ 0
v3.23.2
Significant Accounting Policies - Reconciliation of Net Loss per Common Share (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Net (loss) income $ (1,411,072) $ (1,446,111) $ 1,494,631 $ 5,880,541 $ (2,857,183) $ 7,375,172
Common Stock [Member]            
Net (loss) income (1,411,072)   1,494,631   (2,857,183) 7,375,172
Accretion of temporary equity to redemption value 8,522,150   (368,774)   7,233,917 (386,945)
Net income including accretion of temporary equity to redemption value $ 7,111,078   $ 1,125,857   $ 4,376,734 $ 6,988,227
Class A common stock [Member]            
Weighted-average shares outstanding, basic 2,896,555   27,600,000   5,489,734 27,600,000
Weighted average shares outstanding, diluted 2,896,555   27,600,000   5,489,734 27,600,000
Basic net income (loss) per share $ (2.21)   $ 0.05   $ (0.97) $ 0.22
Diluted net income per share $ (2.21)   $ 0.05   $ (0.97) $ 0.22
Class A common stock [Member] | Common Stock [Member]            
Accretion of temporary equity to redemption value $ (8,522,150)   $ 368,774   $ (7,233,917) $ 386,945
Net income including accretion of temporary equity to redemption value 2,133,323   900,686   1,925,763 5,590,582
Allocation of net (loss) income $ (6,388,827)   $ 1,269,460   $ (5,308,154) $ 5,977,527
Weighted-average shares outstanding, basic 2,896,555   27,600,000   5,489,734 27,600,000
Weighted average shares outstanding, diluted 2,896,555   27,600,000   5,489,734 27,600,000
Basic net income (loss) per share $ (2.21)   $ 0.05   $ (0.97) $ 0.22
Diluted net income per share $ (2.21)   $ 0.05   $ (0.97) $ 0.22
Class B Common Stock [Member]            
Weighted-average shares outstanding, basic 6,900,000   6,900,000   6,900,000 6,900,000
Weighted average shares outstanding, diluted 6,900,000   6,900,000   6,900,000 6,900,000
Basic net income (loss) per share $ 0.72   $ 0.03   $ 0.36 $ 0.2
Diluted net income per share $ 0.72   $ 0.03   $ 0.36 $ 0.2
Class B Common Stock [Member] | Common Stock [Member]            
Accretion of temporary equity to redemption value $ 0   $ 0   $ 0 $ 0
Net income including accretion of temporary equity to redemption value 4,977,755   225,171   2,450,971 1,397,645
Allocation of net (loss) income $ 4,977,755   $ 225,171   $ 2,450,971 $ 1,397,645
Weighted-average shares outstanding, basic 6,900,000   6,900,000   6,900,000 6,900,000
Weighted average shares outstanding, diluted 6,900,000   6,900,000   6,900,000 6,900,000
Basic net income (loss) per share $ 0.72   $ 0.03   $ 0.36 $ 0.2
Diluted net income per share $ 0.72   $ 0.03   $ 0.36 $ 0.2
v3.23.2
Related Party Transactions - Additional Information (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Apr. 05, 2023
Dec. 31, 2022
Apr. 27, 2021
Related Party Transaction [Line Items]              
Due to related party $ 279,193   $ 279,193     $ 144,193  
Payments To Related Parties     0        
Selling, general and administrative expense 30,000 $ 60,000 30,000 $ 60,000      
Related Party [Member]              
Related Party Transaction [Line Items]              
Outstanding balance of related party note             $ 90,922
Expenses incurred and paid     10,000        
Due to related party 966,401   966,401        
Unsecured Promissory Note [Member]              
Related Party Transaction [Line Items]              
Borrowed amount         $ 1,500,000    
Debt Instrument, Interest Rate, Stated Percentage         0.00%    
Long-Term Debt, Gross 515,862   515,862        
Working capital loans warrant [Member]              
Related Party Transaction [Line Items]              
Loan conversion agreement warrant $ 1,500,000   $ 1,500,000        
Price of warrant $ 1   $ 1        
Working Capital Loan $ 0   $ 0     0  
Promissory Note with Related Party [Member]              
Related Party Transaction [Line Items]              
Maximum borrowing capacity of related party promissory note             300,000
Outstanding amount 171,346   171,346     171,346  
Borrowed amount             $ 262,268
Selling, General and Administrative Expenses [Member] | Related Party [Member]              
Related Party Transaction [Line Items]              
Due to related party $ 135,000   $ 135,000     $ 120,000  
v3.23.2
Prepaid Expenses (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Prepaid Expense, Current [Abstract]    
Prepaid insurance, Current $ 3,515 $ 26,081
Other prepaid expenses, Current 10,112 5,029
Prepaid Expense, Current, Total $ 13,627 $ 31,110
v3.23.2
Accounts Payable and Accrued Expenses - Schedule of Company's Accounts Payable and Accrued Expenses (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Accounts Payable and Accrued Liabilities, Current [Abstract]    
Legal accrual $ 4,435,086 $ 1,705,049
Other payables and expenses 229,453 161,943
Total $ 4,664,539 $ 1,866,992
v3.23.2
Commitments & Contingencies (Details)
 3 Months Ended 6 Months Ended 12 Months Ended
Apr. 19, 2023
USD ($)
$ / shares
shares
Oct. 22, 2021
$ / shares
Jun. 30, 2023
USD ($)
Day
$ / shares
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
Day
$ / shares
Jun. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
Related Party Transaction [Line Items]              
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination         30 days    
Maximum number of demands for registration of securities | Day     3   3    
Recovery of offering costs allocated to warrants | $     $ 425,040 $ 0 $ 425,040 $ 0  
Waiver of deferred underwriter fees | $     $ 9,234,960   9,234,960    
Deferred underwriting fees | $         0   $ 9,660,000
Proceeds from sale of restricted investments | $         $ 255,875,758 $ 0  
Shares Issued, Price Per Share     $ 10   $ 10    
Decrease in deferred underwriting liability | $         $ 0    
Reversal of offering costs | $         $ 425,040    
Business Combination Agreement [Member]              
Related Party Transaction [Line Items]              
Minimum Net Worth Required For Compliance | $ $ 5,000,001            
Proceeds from sale of restricted investments | $ $ 20,000,000            
Class A common stock [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share)     0.0001   $ 0.0001   $ 0.0001
Shares Issued, Price Per Share     10   10    
Class A common stock [Member] | Business Combination Agreement [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share) $ 0.0001            
Class B Common Stock [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share)     0.0001   $ 0.0001   $ 0.0001
Temporary equity, carrying amount, period increase (decrease) | $         $ 9,234,960    
Class B Common Stock [Member] | Business Combination Agreement [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share) 0.0001            
ESGEN Common Class A [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share) $ 0.0001            
Class Of Warrant Or Right Description each outstanding warrant to purchase one ESGEN Class A Ordinary Share will become a warrant to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share            
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares 1            
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 11.5            
ESGEN Common Class A [Member] | Warrant [Member]              
Related Party Transaction [Line Items]              
Common Stock, Conversion Basis each issued and outstanding unit of ESGEN, each consisting of ESGEN Class A Ordinary Share and one-half of one warrant to purchase one ESGEN Class A Ordinary Share            
ESGEN Common Class A [Member] | Business Combination Agreement [Member]              
Related Party Transaction [Line Items]              
Common shares, par value, (per share) $ 0.0001            
ESGEN Common Class A [Member] | Warrant Agreement [Member]              
Related Party Transaction [Line Items]              
Class Of Warrant Or Right Description one-half of onewarrant representing the right to purchase one share of ESGEN Class A Common Stock at an exercise price of $11.50 per share            
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | shares 1            
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 11.5            
Initial Public Offering [Member]              
Related Party Transaction [Line Items]              
Deferred Underwriting Discount   3.50%          
Shares Issued, Price Per Share   $ 10.2 $ 10   $ 10    
Sponsor [Member] | Class A common stock [Member]              
Related Party Transaction [Line Items]              
Warrants And Rights Outstanding Exercisable Term After Business Combinations         30 days    
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination         1 year    
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences         150 days    
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | Day         20    
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share)         $ 12    
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | Day         30    
Sponsor [Member] | Class A common stock [Member] | Initial Subscription Agreement [Member]              
Related Party Transaction [Line Items]              
Stock Issued During Period, Shares, Issued for Services | shares 1,000,000            
Shares Issued, Price Per Share $ 10            
Stock Issued During Period, Value, Issued for Services | $ $ 10,000,000            
v3.23.2
Warrant Liabilities (Details) - $ / shares
 6 Months Ended
Jun. 30, 2023
Jan. 18, 2023
Oct. 22, 2021
Warrants outstanding     27,840,000
Share Price $ 9.2 $ 0.04  
Threshold Period For Registration Statement To Be Effective After Which Warrants Can Be Exercised 60 days    
Fair Market Value Price $ 0.361    
Public Warrants expiration term 5 years    
Percentage Of Gross Proceeds On Total Equity Proceeds 60.00%    
Adjustment of exercise price of warrants based on market value (as a percent) 115.00%    
Percentage of adjustment of redemption price of stock based on market value. 180.00%    
Stock price trigger for redemption of public warrants $ 18    
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination 30 days    
Shares Issued, Price Per Share $ 10    
Class A common stock [Member]      
Trading Day Prior To The Date On Which The Notice Of Exercise 10 days    
Shares Issued, Price Per Share $ 10    
Redemption Of Warrant Price Per Share Equals Or Exceeds18.00 [Member]      
Share Price 18    
Redemption price per public warrant (in dollars per share) $ 0.01    
Minimum threshold written notice period for redemption of public warrants 30 days    
Threshold trading days for redemption of public warrants 20 days    
Redemption Of Warrant Price Per Share Equals Or Exceeds10.00 [Member]      
Share Price $ 0.1    
Redemption price per public warrant (in dollars per share) $ 10    
Minimum threshold written notice period for redemption of public warrants 30 days    
Threshold trading days for redemption of public warrants 20 days    
Shares Issued, Price Per Share $ 10    
Public Warrants [Member]      
Warrants outstanding     13,800,000
Public Warrants [Member] | Class A common stock [Member]      
Shares Issued, Price Per Share $ 11.5    
Private Warrants [Member]      
Warrants outstanding     14,040,000
v3.23.2
Recurring Fair Value Measurements - Fair value hierarchy for liabilities measured at fair value on recurring basis (Details) - USD ($)
Jun. 30, 2023
Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities held in Trust Account $ 31,631,853 $ 285,506,568
Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities held in Trust Account 31,631,853 285,506,568
Total warrant liabilities 1,948,800 796,224
Recurring [Member] | Public Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 1,015,680 394,680
Recurring [Member] | Private Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 1,033,344 401,544
Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Marketable securities held in Trust Account 31,631,853 285,506,568
Total warrant liabilities 966,000 394,680
Level 1 [Member] | Recurring [Member] | Public Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 1,015,680 394,680
Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 982,800 401,544
Level 2 [Member] | Recurring [Member] | Private Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 1,033,344 401,544
Level 3 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities 0 0
Level 3 [Member] | Recurring [Member] | Private Warrants [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total warrant liabilities $ 0 $ 0
v3.23.2
Recurring Fair Value Measurements - Additional Information (Details)
 6 Months Ended
Jun. 30, 2022
USD ($)
Derivative Instrument Detail [Abstract]  
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Transfers, Net $ 0
v3.23.2
Shareholder's Equity - Preferred Stock Shares (Details) - $ / shares
Jun. 30, 2023
Dec. 31, 2022
Stockholders' Equity Note [Abstract]    
Preferred shares, shares authorized 1,000,000 1,000,000
Preferred stock, par value, (per share) $ 0.0001 $ 0.0001
Preferred shares, shares issued 0 0
Preferred shares, shares outstanding 0 0
v3.23.2
Shareholder's Equity-Common Stock Shares (Details)
 6 Months Ended
Jun. 30, 2023
$ / shares
shares
Dec. 31, 2022
$ / shares
shares
Class of Stock [Line Items]    
Aggregate Percentage of Outstanding Shares Issued to Initial Shareholders Prior to Business Combination 20.00%  
Class A common stock [Member]    
Class of Stock [Line Items]    
Common shares, shares authorized (in shares) 250,000,000 250,000,000
Common shares, par value (in dollars per share) | $ / shares $ 0.0001 $ 0.0001
Common shares, shares issued (in shares) 0 0
Common shares, shares outstanding (in shares) 0 0
Class A common stock subject to possible redemption, outstanding (in shares) 2,896,555 27,600,000
Class B Common Stock [Member]    
Class of Stock [Line Items]    
Common shares, shares authorized (in shares) 25,000,000 25,000,000
Common shares, par value (in dollars per share) | $ / shares $ 0.0001 $ 0.0001
Common shares, shares issued (in shares) 6,900,000 6,900,000
Common shares, shares outstanding (in shares) 6,900,000 6,900,000
Ratio to be applied to the stock in the conversion 20  
ESGEN Acquisition (NASDAQ:ESACU)
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