UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
☒ QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 2023
☐ TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-41168
FTAC EMERALD ACQUISITION CORP.
(Exact Name of Registrant as Specified in Its
Charter)
Delaware | | 86-2170416 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
2929 Arch Street, Suite 1703, Philadelphia, PA | | 19104 |
(Address of principal executive offices) | | (Zip Code) |
(215) 701-9555
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Class A common stock, par value $0.0001 per share | | EMLD | | Nasdaq Global Market |
Redeemable warrants, each whole warrant exercisable for one share of Class A common stock | | EMLDW | | Nasdaq Global Market |
Units, each consisting of one share of Class A common stock and one- half of one redeemable warrant | | EMLDU | | Nasdaq Global Market |
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | | Smaller reporting company | ☒ |
| | Emerging growth company | ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of August 9, 2023, there were 25,845,423
shares of Class A common stock, $0.0001 par value, and 8,615,141 shares of Class B common stock, $0.0001 par value, issued and outstanding.
FTAC EMERALD ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
FTAC EMERALD ACQUISITION CORP.
CONDENSED BALANCE SHEETS
| |
June
30,
2023 (Unaudited) | | |
December 31,
2022 | |
Assets | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
$ | 145,898 | | |
$ | 72,753 | |
Prepaid expenses | |
| 73,236 | | |
| 185,213 | |
Total current assets | |
| 219,134 | | |
| 257,966 | |
| |
| | | |
| | |
Reimbursement receivable | |
| 1,155,000 | | |
| 1,155,000 | |
Investments held in Trust Account | |
| 258,300,436 | | |
| 254,251,750 | |
TOTAL ASSETS | |
$ | 259,674,570 | | |
$ | 255,664,716 | |
| |
| | | |
| | |
Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit | |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 181,148 | | |
$ | 111,063 | |
Due to related party | |
| 21,535 | | |
| 21,535 | |
Income tax payable | |
| 28,745 | | |
| 359,410 | |
Promissory note - related party | |
| 1,275,000 | | |
| — | |
Total current liabilities | |
| 1,506,428 | | |
| 492,008 | |
| |
| | | |
| | |
Deferred underwriters’ discount | |
| 8,704,270 | | |
| 8,704,270 | |
Deferred advisory fee | |
| 1,155,000 | | |
| 1,155,000 | |
Total liabilities | |
| 11,365,698 | | |
| 10,351,278 | |
| |
| | | |
| | |
Commitments and Contingencies | |
| | | |
| | |
| |
| | | |
| | |
Class A common stock subject to possible redemption, $0.0001 par value; 24,869,342 issued and outstanding shares at a redemption value of $10.38 and $10.21 per share as of June 30, 2023 and December 31, 2022, respectively | |
| 258,234,731 | | |
| 253,814,255 | |
| |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of June 30, 2023 and December 31, 2022 | |
| — | | |
| — | |
Class A common stock, $0.0001 par value; 42,000,000 shares authorized; 976,081 shares issued and outstanding as of June 30, 2023 and December 31, 2022 (net of 24,869,342 shares subject to possible redemption as of June 30, 2023 and December 31, 2022) | |
| 98 | | |
| 98 | |
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 8,615,141 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | |
| 861 | | |
| 861 | |
Additional paid-in capital | |
| — | | |
| — | |
Accumulated deficit | |
| (9,926,818 | ) | |
| (8,501,776 | ) |
Total stockholders’ deficit | |
| (9,925,859 | ) | |
| (8,500,817 | ) |
Total Liabilities, Common Stock Subject to Possible Redemption and Stockholders’ Deficit | |
$ | 259,674,570 | | |
$ | 255,664,716 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
FTAC EMERALD ACQUISITION CORP.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
For the Three Months Ended June 30, | | |
For the Six Months Ended June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Operating and formation costs | |
$ | 694,546 | | |
$ | 383,532 | | |
$ | 1,567,443 | | |
$ | 873,036 | |
Loss from operations | |
| (694,546 | ) | |
| (383,532 | ) | |
| (1,567,443 | ) | |
| (873,036 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income: | |
| | | |
| | | |
| | | |
| | |
Interest income earned on investments held in trust account | |
| 3,052,686 | | |
| 339,099 | | |
| 5,749,212 | | |
| 364,340 | |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) before provision for income taxes | |
| 2,358,140 | | |
| (44,433 | ) | |
| 4,181,769 | | |
| (508,696 | ) |
Provision for income taxes | |
| (630,565 | ) | |
| (44,337 | ) | |
| (1,186,335 | ) | |
| (44,337 | ) |
Net income (loss) | |
$ | 1,727,575 | | |
$ | (88,770 | ) | |
$ | 2,995,434 | | |
$ | (553,033 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding, Class A common stock | |
| 25,845,423 | | |
| 25,845,423 | | |
| 25,845,423 | | |
| 25,616,827 | |
Basic and diluted net income (loss) per common stock, Class A common stock | |
$ | 0.05 | | |
$ | (0.00 | ) | |
$ | 0.09 | | |
$ | (0.02 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average shares outstanding, Class B common stock | |
| 8,615,141 | | |
| 8,615,141 | | |
| 8,615,141 | | |
| 8,538,942 | |
Basic and diluted net income (loss) per common stock, Class B common stock | |
$ | 0.05 | | |
$ | (0.00 | ) | |
$ | 0.09 | | |
$ | (0.02 | ) |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
FTAC EMERALD ACQUISITION CORP.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’
DEFICIT
(UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2023
| |
Class A | | |
Class B | | |
Additional | | |
| | |
Total | |
| |
Common Stock | | |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as of January 1, 2023 | |
| 976,081 | | |
$ | 98 | | |
| 8,615,141 | | |
$ | 861 | | |
$ | — | | |
$ | (8,501,776 | ) | |
$ | (8,500,817 | ) |
Accretion of common stock subject to possible redemption | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (2,048,355 | ) | |
| (2,048,355 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,267,859 | | |
| 1,267,859 | |
Balance as of March 31, 2023 (Unaudited) | |
| 976,081 | | |
| 98 | | |
| 8,615,141 | | |
| 861 | | |
| — | | |
| (9,282,272 | ) | |
| (9,281,313 | ) |
Accretion of common stock subject to possible redemption | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (2,372,121 | ) | |
| (2,372,121 | ) |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,727,575 | | |
| 1,727,575 | |
Balance as of June 30, 2023 (Unaudited) | |
| 976,081 | | |
$ | 98 | | |
| 8,615,141 | | |
$ | 861 | | |
$ | — | | |
$ | (9,926,818 | ) | |
$ | (9,925,859 | ) |
FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2022
| |
Class A | | |
Class B | | |
Additional | | |
| | |
Total | |
| |
Common Stock | | |
Common Stock | | |
Paid-in | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as of January 1, 2022 | |
| 890,000 | | |
$ | 89 | | |
| 8,763,333 | | |
$ | 876 | | |
$ | — | | |
$ | (5,979,383 | ) | |
$ | (5,978,418 | ) |
Forfeiture of Founder Shares | |
| — | | |
| — | | |
| (148,192 | ) | |
| (15 | ) | |
| 15 | | |
| — | | |
| — | |
Sale of private placement units in over-allotment | |
| 86,081 | | |
| 9 | | |
| — | | |
| — | | |
| 860,801 | | |
| — | | |
| 860,810 | |
Sale of Public Units in over-allotment, net of offering costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| 454,360 | | |
| — | | |
| 454,360 | |
Accretion of common stock subject to possible redemption | |
| — | | |
| — | | |
| — | | |
| — | | |
| (1,315,176 | ) | |
| (1,004,256 | ) | |
| (2,319,432 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (464,263 | ) | |
| (464,263 | ) |
Balance as of March 31, 2022 (Unaudited) | |
| 976,081 | | |
| 98 | | |
| 8,615,141 | | |
| 861 | | |
| — | | |
| (7,447,902 | ) | |
| (7,446,943 | ) |
Accretion of common stock subject to possible redemption | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (129,829 | ) | |
| (129,829 | ) |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (88,770 | ) | |
| (88,770 | ) |
Balance as of June 30, 2022 (Unaudited) | |
| 976,081 | | |
$ | 98 | | |
| 8,615,141 | | |
$ | 861 | | |
$ | — | | |
$ | (7,666,501 | ) | |
$ | (7,665,542 | ) |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
FTAC EMERALD ACQUISITION CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| |
For the Six Months Ended June 30, | |
| |
2023 | | |
2022 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 2,995,434 | | |
$ | (553,033 | ) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
| | | |
| | |
Interest income earned on investments held in trust account | |
| (5,749,212 | ) | |
| (364,340 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 111,977 | | |
| 167,369 | |
Accounts payable and accrued expenses | |
| 70,085 | | |
| 13,078 | |
Income tax payable | |
| (330,665 | ) | |
| 44,337 | |
Net cash used in operating activities | |
| (2,902,381 | ) | |
| (692,589 | ) |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Principal deposited in Trust Account | |
| — | | |
| (28,980,354 | ) |
Cash withdrawn from Trust Account for tax purposes | |
| 1,700,526 | | |
| 141,413 | |
Net cash provided by (used in) investing activities | |
| 1,700,526 | | |
| (28,838,941 | ) |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Proceeds from initial public offering, net of costs | |
| — | | |
| 28,119,274 | |
Proceeds from promissory note - related party | |
| 1,275,000 | | |
| — | |
Proceeds from private placement units | |
| — | | |
| 861,088 | |
Net cash provided by financing activities | |
| 1,275,000 | | |
| 28,980,362 | |
| |
| | | |
| | |
Net Change in Cash | |
| 73,145 | | |
| (551,168 | ) |
Cash – Beginning of period | |
| 72,753 | | |
| 1,227,914 | |
Cash – End of period | |
$ | 145,898 | | |
$ | 676,746 | |
| |
| | | |
| | |
Supplemental disclosure of noncash investing and financing activities: | |
| | | |
| | |
Cash paid for income taxes | |
$ | 1,517,000 | | |
$ | — | |
Deferred underwriting payable charged to additional paid-in capital | |
$ | — | | |
$ | 1,004,270 | |
The accompanying notes are an integral part of
the unaudited condensed financial statements.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
NOTE 1. ORGANIZATION AND BUSINESS OPERATIONS
FTAC Emerald Acquisition Corp. (the “Company”)
is a blank check company incorporated in Delaware on February 19, 2021, for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
The Company may pursue an initial Business Combination target in any business or industry.
As of June 30, 2023, the Company had not commenced
any operations. All activity for the period from February 19, 2021 (inception) through June 30, 2023 relates to the Company’s formation,
the Public Offering (the “Public Offering” or “IPO”), and efforts in identifying a target to consummate an 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 generates non-operating income in the form of interest income from the proceeds derived from the Public
Offering placed in the Trust Account.
The Company’s Sponsors are Emerald ESG
Sponsor, LLC, a Delaware limited liability company, and Emerald ESG Advisors, LLC, a Delaware limited liability company (collectively,
the “Sponsor”).
The registration statement for the Company’s
Public Offering was declared effective on December 15, 2021 (the “Effective Date”). On December 20, 2021, the Company consummated
its Public Offering of 22,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units
being offered, the “public shares”) at $10.00 per Unit, which is discussed in Note 3, and the sale of 890,000 placement units
(the “Private Placement Units”) at a price of $10.00 per Private Placement Unit in a private placement to the Sponsor, which
is discussed in Note 4 (“Private Placement”).
The underwriter of the Company’s IPO subsequently
provided notice of its election to partially exercise its over-allotment option, and the closing of the issuance and sale of the additional
Units (the “Over-Allotment Option Units”) occurred on January 14, 2022. A total aggregate issuance by the Company of 2,869,342
Over-Allotment Option Units at a price of $10.00 per Over-Allotment Option Unit resulted in total gross proceeds of $28,693,420 to the
Company.
Simultaneously with the issuance and sale of
the Over-Allotment Option Units, the Company consummated the private sale of an additional 86,081 Private Placement Units (the “Additional
Private Placement Units”) at a price of $10.00 per Additional Private Placement Unit to the Sponsor, generating gross proceeds
of $860,810.
Transaction costs related to the IPO and over-allotment
amounted to $14,181,568, consisting of $4,973,868 of underwriting commissions, $8,704,270 in deferred underwriting fees, and $503,430
of other offering costs.
The Company must complete one or more Business
Combinations having an aggregate fair market value of at least 80% of the value of the 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 the Company’s
signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete an initial
Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target
or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company
under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company
will be able to successfully effect a Business Combination.
Following the closing of the Public Offering,
the partial exercise of the over-allotment option, and the sale of the Private Placement Units, a total of $251,180,354 ($10.10 per Unit)
was placed in a Trust Account (“Trust Account”). The proceeds are invested only in U.S. government securities with a maturity
of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest
only in direct U.S. government treasury obligations. Except for any interest income released to the Company to pay franchise and income
taxes and up to $100,000 of interest to pay dissolution expenses, none of the funds held in trust will be released from the Trust Account
until the earlier of (i) the consummation of the initial Business Combination; (ii) the redemption of the public shares if the Company
is unable to consummate a Business Combination within 21 months from the closing of the Public Offering (the “Completion Window”);
or (iii) the redemption of any public shares properly tendered in connection with a stockholder vote to approve an amendment to the Company’s
amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to provide
for the redemption of the public shares in connection with an initial Business Combination or to redeem 100% of the public shares if
the Company has not consummated the initial Business Combination within the Completion Window, or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial Business Combination activity. The proceeds deposited in the Trust Account could
become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public stockholders.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
Liquidity and Capital Resources
As of June 30, 2023, the Company had $145,898
in cash and a working capital deficit of $1,221,589, which excludes franchise tax payable and income tax payable. Prior to the completion
of the Company’s IPO, the Company’s liquidity needs had been satisfied through a capital contribution from the Sponsor of
$25,000 and a loan to the Company of up to $300,000 by the Company’s Sponsor under an unsecured promissory note. The outstanding
balance under the promissory note of $105,260 was repaid on December 27, 2021, and the promissory note was terminated.
In order to finance transaction costs in connection
with an intended initial 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 (the “Working Capital Loans”). If
the Company completes the initial Business Combination, the Company expects to repay such loaned amounts out of the proceeds of the Trust
Account released to it. 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 such loaned amounts but no proceeds from the Trust Account would be used to repay such
loaned amounts. At June 30, 2023 and December 31, 2022, $1,275,000 and $0 of Working Capital Loans were outstanding, respectively.
Going Concern
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update
(“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”
the Company has until September 20, 2023 to consummate a Business Combination. It is uncertain whether the Company will be able to consummate
a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation
and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a
Business Combination not occur, and potential subsequent dissolution raises substantial doubt about the Company’s ability to continue
as a going concern. Management intends to consummate a Business Combination prior to September 20, 2023. No adjustments have been made
to the carrying amounts of assets or liabilities should the Company be required to liquidate after September 20, 2023.
NOTE 2. SUMMARY OF 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-Q and Article 8 of Regulation S-X of the Securities
and Exchange Commission (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 for the period ended December 31, 2022,
as filed with the SEC on March 29, 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 year ending December 31, 2023, or for any future periods.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart
Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Securities Exchange Act of 1934, as amended (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.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
Use of Estimates
The preparation of the unaudited condensed financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses
during the reporting periods.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial 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 and Cash Equivalents
As of June 30, 2023 and December 31, 2022, the
Company had $145,898 and $72,753 in cash, respectively. The Company considers all short-term investments with an original maturity of
three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of June 30, 2023 and December
31, 2022.
Net Income (Loss) Per Common Stock
The Company has two classes of shares, which
are referred to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of
shares. The Company has not considered the effect of the warrants sold in the Public Offering and the Private Placement to purchase an
aggregate of 12,922,712 shares of its Class A common stock in the calculation of diluted net income (loss) per share, since their exercise
is contingent upon future events. As a result, diluted net income (loss) per share of common stock is the same as basic net income (loss)
per share of common stock. The redemption feature for the common shares equals fair value, and therefore does not create a different
class of shares or require an adjustment to the earnings per share calculation. The redemption at fair value does not represent an economic
benefit to the holders that is different from what is received by other stockholders, because the shares could be sold on the open market.
Accretion associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates
the fair value. The table below presents a reconciliation of the numerator and denominator used to compute basic and diluted net income
(loss) per share for each class of common stock:
| |
For the Three Months Ended June 30 | | |
For the Six Months Ended June 30 | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic and diluted net income (loss) per share of common stock: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 1,295,681 | | |
$ | 431,894 | | |
$ | (66,578 | ) | |
$ | (22,193 | ) | |
$ | 2,246,575 | | |
$ | 748,859 | | |
$ | (414,775 | ) | |
$ | (138,258 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Weighted-average shares outstanding | |
| 25,845,423 | | |
| 8,615,141 | | |
| 25,845,423 | | |
| 8,615,141 | | |
| 25,845,423 | | |
| 8,615,141 | | |
| 25,616,827 | | |
| 8,538,942 | |
Basic and diluted net income (loss) per common stock | |
$ | 0.05 | | |
$ | 0.05 | | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | 0.09 | | |
$ | 0.09 | | |
$ | (0.02 | ) | |
$ | (0.02 | ) |
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
Class A Common Stock Subject to Possible
Redemption
The Company accounts for its common stock subject
to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing
Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and measured
at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are within the control
of the holder or subject to possible redemption upon the occurrence of uncertain events not solely within the Company’s control)
is classified as temporary equity. At all other times, common stock is classified as stockholders’ deficit. The Company’s
Class A common stock sold in the IPO and over-allotment features certain redemption rights that are considered to be outside of the Company’s
control and subject to the occurrence of uncertain future events. Accordingly, as of June 30, 2023 and December 31, 2022, 24,869,342
shares of Class A common stock subject to possible redemption are presented at redemption value as temporary equity, outside of the stockholders’
deficit section of the Company’s condensed balance sheets, respectively.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,” approximates
the carrying amounts represented in the condensed balance sheets, primarily due to their 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 for 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. |
Warrant Classification
The Company accounts for the warrants issued
in connection with the Public Offering and the Private Placement in accordance with the guidance contained in ASC 815-40 under which
the warrants meet the criteria for equity treatment and are recorded as equity.
Income Taxes
The Company accounts for income taxes under
ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both
the expected impact of differences between the unaudited condensed financial statements 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. As of June 30, 2023 and December 31, 2022, the Company’s deferred tax asset had a full valuation allowance recorded
against it. The Company’s effective tax rate was (26.74)% and 99.78% for the three months ended June 30, 2023 and 2022,
respectively, and (28.37)% and 8.72% for the six months ended June 30, 2023 and 2022, respectively. The effective tax rate differs
from the statutory tax rate of 21% for the three and six months ended June 30, 2023 and 2022, due to changes in the valuation
allowance on the deferred tax assets.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of June 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result
in significant payments, accruals or material deviation from its position.
The Company has identified the United States
as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant
adverse impact on the Company’s financial condition.
Recent Accounting Standards
In August 2020, the FASB issued ASU No.
2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in
Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own
Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation
models required under current GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to
qualify for the derivative scope exception, and it also simplifies the diluted earnings per share calculation in certain areas. ASU
2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, with
early adoption permitted. We are currently assessing the impact, if any, that ASU 2020-06 would have on the Company’s financial position, results of operations or cash flows.
Management does not believe that any recently
issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited
condensed financial statements.
Risks and Uncertainties
In February 2022, the Russian Federation and
Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States,
have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions
on the world economy is not determinable as of the date of these unaudited condensed financial statements and the specific impact on
the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited
condensed financial statements.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
On August 16, 2022, the Inflation Reduction Act
of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise
tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly
traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself,
not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the
shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are
permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same
taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”)
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax. Whether
and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise
would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business
Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE”
or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination
but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.
In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment
of the excise tax have not been determined. The foregoing could cause a reduction in the cash available on hand to complete a Business
Combination and in the Company’s ability to complete a Business Combination.
NOTE 3. INITIAL PUBLIC OFFERING
On December 20, 2021, the Company consummated
its IPO of 22,000,000 Units at a purchase price of $10.00 per Unit. Each Unit consists of one share of Class A common stock and one-half
of one redeemable warrant (the “Public Warrants”). On January 11, 2022, the underwriter partially exercised its over-allotment
option, resulting in the sale on January 14, 2022 of an additional 2,869,342 Units.
All of the 24,869,342 shares of Class A common
stock sold as part of the Units in the IPO contain a redemption feature which allows for the redemption of such public shares in connection
with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and
in connection with certain amendments to the Company’s certificate of incorporation. In accordance with the guidance in ASC Topic
480, “Distinguishing Liabilities from Equity,” and with the SEC and its staff’s guidance on redeemable equity instruments,
which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject
to redemption to be classified outside of permanent equity.
As of June 30, 2023 and December 31, 2022, the common stock subject
to redemption reflected on the balance sheets is reconciled in the following table:
Gross proceeds, including over-allotment | |
$ | 248,693,420 | |
Less: | |
| | |
Proceeds allocated to Public Warrants | |
| (8,264,360 | ) |
Class A common stock issuance costs | |
| (13,734,146 | ) |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 27,119,341 | |
Class A common stock subject to possible
redemption, December 31, 2022 | |
$ | 253,814,255 | |
Plus: | |
| | |
Accretion of carrying value to redemption value | |
| 4,420,476 | |
Class A common
stock subject to possible redemption, June 30, 2023 | |
$ | 258,234,731 | |
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Public
Offering, the Sponsor purchased an aggregate of 890,000 Private Placement Units for a purchase price of $8,900,000, or $10.00 per unit,
in a private placement. Additionally, concurrently with the partial exercise of the over-allotment option by the underwriter, the Company
issued to the Sponsor 86,081 Private Placement Units at a price of $10.00 per Private Placement Unit for total proceeds of $860,810.
Each Private Placement Unit consists of one share of Class A common stock and one-half of one Warrant, with each whole warrant entitling
the holder thereof to purchase one share of Class A common stock for $11.50, subject to adjustment.
The Private Placement Warrants are identical
to the warrants sold in the Public Offering, except that if held by the Sponsor or its permitted transferees, they (including the common
stock issuable upon exercise of these warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by the
holders until 30 days after the consummation of the initial Business Combination. There will be no redemption rights or liquidating distributions
with respect to the Founder Shares (defined below), placement shares or warrants, which will expire worthless if the Company does not
complete an initial Business Combination.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On June 2, 2021, the Sponsor purchased 7,992,750
shares of Class B common stock for an aggregate purchase price of $25,000, and on October 14, 2021, the Company effected a 1.1014-for-1.0
stock split, so that the Sponsor owned an aggregate of 8,803,333 shares of Class B common stock (the “Founder Shares”). On
November 12, 2021, the Company effected a 0.9955-for-1.0 stock split, so that the Sponsor owns an aggregate of 8,763,333 Founder Shares.
All shares and related amounts have been retroactively adjusted to reflect the split (see Note 7). The number of Founder Shares outstanding
was determined based on the expectation that the total size of the Public Offering would be a maximum of 25,300,000 Units if the underwriter’s
over-allotment option was exercised in full, and therefore that such Founder Shares would represent 25% of the outstanding shares after
the Public Offering. In connection with the partial exercise of the underwriter’s over-allotment option, 148,192 shares of Class
B common stock were forfeited.
The Sponsor has agreed not to transfer, assign
or sell any of its Founder Shares (i) with respect to 25% of such shares, until consummation of the initial Business Combination, (ii)
with respect to 25% of such shares, until the earlier of the second anniversary of the consummation of the initial Business Combination
or the first date at which the closing price of the Class A common stock exceeds $12.00 for any 20 trading days within a 30-trading day
period following the consummation of the initial Business Combination, (iii) with respect to 25% of such shares, until the earlier of
the second anniversary of the consummation of the initial Business Combination or the first date at which the closing price of the Class
A common stock exceeds $13.50 for any 20 trading days within a 30-trading day period following the consummation of the initial Business
Combination, and (iv) with respect to 25% of such shares, until the earlier of the second anniversary of the consummation of the initial
Business Combination or the first date at which the closing price of the Class A common stock exceeds $15.00 for any 20 trading days
within a 30-trading day period following the consummation of the initial Business Combination. Notwithstanding the foregoing, the transfer
restrictions set forth in the immediately preceding sentence shall terminate upon the date following the initial Business Combination
on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the
stockholders having the right to exchange their shares of common stock for cash, securities or other property. Any permitted transferees
would be subject to the same restrictions and other agreements of the initial stockholders with respect to any Founder Shares. Notwithstanding
the foregoing, in connection with an initial Business Combination, the initial holders may transfer, assign or sell their Founder Shares
with the Company’s consent to any person or entity that agrees in writing to be bound by the transfer restrictions set forth above.
Promissory Note — Related Party
Emerald ESG Sponsor, LLC agreed to loan the Company
up to $300,000 to be used for a portion of the expenses of the Public Offering. These loans were non-interest bearing, unsecured and
were due at the earlier of June 30, 2022 or the closing of the Public Offering. The outstanding balance under the promissory note of
$105,260 was repaid on December 27, 2021, and the promissory note was terminated and is no longer available to be drawn upon. As of June
30, 2023 and December 31, 2022, there were no amounts outstanding under the promissory note.
On January 13, 2023, the Sponsor agreed to loan
the Company up to $1,500,000 (the “Promissory Note”). The note is non-interest bearing and all outstanding amounts under
the Promissory Note will be due on the date on which the Company consummates a Business Combination. If the Company does not consummate
a Business Combination, the Company may use a portion of any funds held outside the Trust Account into which the Company has placed the
proceeds of the IPO to repay the Promissory Note; however, no proceeds from the Trust Account may be used for such repayment. If such
funds are insufficient to repay the Promissory Note, the unpaid amounts would be forgiven. No portion of the amounts outstanding under
the Promissory Note may be converted into units at a price of $10.00 per unit, which would have been permissible as described in the
prospectus filed in connection with the IPO. As of June 30, 2023 and December 31, 2022, there was $1,275,000 and $0 outstanding under
the Promissory Note, respectively.
Related Party Loans
In order to finance transaction costs in connection
with an intended initial 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 (the “Working Capital Loans”). If
the Company completes the initial Business Combination, the Company expects to repay such loaned amounts out of the proceeds of the Trust
Account released to the Company. 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 such loaned amounts but no proceeds from the Trust Account would be used
to repay such loaned amounts. On January 13, 2023, the Sponsor agreed to loan the Company up to an aggregate principal amount of $1,500,000
pursuant to the Promissory Note described above. At June 30, 2023 and December 31, 2022, $1,275,000 and $0 of such Working Capital Loans
were outstanding, respectively.
Administrative Services Agreement
The Company has entered into an administrative
services agreement as of the effective date of the registration statement for the Public Offering pursuant to which the Company will
pay the Sponsor or its designee a total of $30,000 per month for office space, administrative and shared personnel support services.
Upon completion of the Company’s initial Business Combination or its liquidation, the Company will cease paying these monthly fees.
For the three and six months ended June 30, 2023, the Company incurred $90,000 and $180,000, respectively, for the administrative support
services. As of June 30, 2023, $90,000 of the administrative services fees were included in accrued expenses in the accompanying balance
sheets. For the three and six months ended June 30, 2022, the Company incurred and paid $90,000 and $180,000, respectively, for the administrative
support services. As of June 30, 2023 and December 31, 2022, $21,535 and $16,451 of administrative support services was included in Due
to related party in the accompanying unaudited condensed balance sheets, respectively.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration Rights
Pursuant to a registration rights agreement entered
into on December 15, 2021, the holders of the Founder Shares, Private Placement Units and units that may be issued upon conversion of
Working Capital Loans (and any Class A common stock issuable upon the exercise of the Private Placement Units and units that may be issued
upon conversion of Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights, requiring the
Company to register such securities and any other securities of the Company acquired by them prior to the consummation of a Business
Combination for resale (in the case of the Founder Shares, only after conversion to the Class A common stock). 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 a Business Combination. The registration rights agreement does not contain liquidated damages or other cash settlement provisions
resulting from delays in registering the securities. The Company will bear the expenses incurred in connection with the filing of any
such registration statements.
Warrant Amendments
The warrant agreement provides that the terms
of the warrants may be amended without the consent of any stockholder or warrant holder to cure any ambiguity or correct any defective
provision or to make any amendments that are necessary in the good faith determination of the board of directors of the Company (taking
into account then existing market precedents) to allow for the warrants to continue to be classified as equity in the Company’s
unaudited condensed financial statements, but requires the approval by the holders of at least 50% of the then outstanding public warrants
to make any change that adversely affects the interests of the registered holders of public warrants. Accordingly, the Company may amend
the terms of the public warrants (i) in a manner adverse to a holder of public warrants if holders of at least 50% of the then outstanding
public warrants approve of such amendment or (ii) to the extent necessary for the warrants in the good faith determination of the board
of directors of the Company (taking into account then existing market precedents) to allow for the warrants to continue to be classified
as equity in the Company’s unaudited condensed financial statements without the consent of any stockholder or warrant holder. Although
the Company’s ability to amend the terms of the public warrants with the consent of at least 50% of the then outstanding public
warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants,
convert the warrants into cash or shares, shorten the exercise period or decrease the number of shares of Class A common stock purchasable
upon exercise of a warrant.
Underwriting Agreement
The underwriter earned a cash underwriting discount
of two percent (2%) of the gross proceeds of the Public Offering and exercise of the over-allotment, or $4,973,868. Additionally, the
underwriter will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds, or $8,704,270, of the Public Offering
and exercise of the over-allotment upon the completion of the Company’s initial Business Combination.
Financial Advisory Fee
The Company engaged Cohen & Company Capital
Markets, a related party and a division of J.V.B. Financial Group, LLC (“CCM”), to provide financial advisory services in
connection with the Public Offering. The Company paid CCM a fee in an amount equal to 0.3% of the aggregate proceeds of the Public Offering
(excluding the proceeds of the exercise of the over-allotment option) net of underwriter’s expenses, which was paid to CCM upon
the closing of the Public Offering.
The Company also intends to engage CCM as an
advisor in connection with the Business Combination for which it will earn an advisory fee of 0.525% of the proceeds of the Public Offering
(excluding the proceeds of the exercise of the over-allotment option) payable at closing of the Business Combination.
CCM will also be entitled to an advisory fee
equal to 0.825% of the aggregate proceeds of the exercise of the over-allotment option, payable at the closing of the Business Combination.
The underwriter has agreed to reimburse the Company for the fee to CCM as it becomes payable out of the underwriting commission. Accordingly,
a reimbursement receivable and deferred advisory fee of $1,155,000 has been reflected in the accompanying unaudited condensed balance
sheets.
NOTE 7. STOCKHOLDERS’ DEFICIT
Preferred Stock
The Company is authorized to issue 1,000,000
shares of preferred stock with a par value of $0.0001 per share. At June 30, 2023 and December 31, 2022, there were no shares of preferred
stock issued or outstanding.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
Class A Common Stock
The Company is authorized to issue 42,000,000
shares of Class A common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each
share. As of June 30, 2023 and December 31, 2022, there were 25,845,423 shares of Class A common stock issued and outstanding, of which
24,869,342 shares are subject to possible redemption and thus classified as temporary equity.
Class B Common Stock
The Company is authorized to issue 10,000,000
shares of Class B common stock with a par value of $0.0001 per share. Holders of the Class B common stock are entitled to one vote for
each share. Holders of Class B common stock will vote on the election of directors prior to the consummation of a Business Combination.
Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote
of stockholders except as required by law. As of June 30, 2023 and December 31, 2022, there were 8,615,141 shares of Class B common stock
issued and outstanding, of which 1,133,333 shares were subject to forfeiture as of December 31, 2021 to the extent that the underwriter’s
over-allotment option was not exercised in full so that the Founder Shares will represent, on an as-converted basis, 25% of the Company’s
issued and outstanding shares after the Public Offering. The underwriter provided notice of its election to partially exercise its over-allotment
option, and the closing of the sale of the additional Units occurred on January 14, 2022. As a result of the underwriter exercising its
over-allotment option in part, the Company’s initial holders forfeited 148,192 Founder Shares.
The shares of Class B common stock will automatically
convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment
as provided herein. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued
in excess of the amounts sold in the Public Offering and related to the closing of the initial Business Combination, the ratio at which
shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of
the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so
that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate,
on an as-converted basis, 25% of the sum of the total number of all shares of common stock issued and outstanding upon completion of
the Public Offering, including placement shares, plus all shares of Class A common stock and equity-linked securities issued or deemed
issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued,
to any seller in the initial Business Combination and any private placement-equivalent securities issued to the Sponsor or its affiliates
upon conversion of loans made to the Company. The term “equity-linked securities” refers to any debt or equity securities
that are convertible, exercisable or exchangeable for shares of Class A common stock issued in a financing transaction in connection
with the initial Business Combination, including but not limited to a private placement of equity or debt. Securities could be “deemed
issued” for purposes of the conversion rate adjustment if such shares are issuable upon the conversion or exercise of convertible
securities, warrants or similar securities.
Warrants
As of June 30, 2023 and December 31, 2022, there
were 12,434,671 Public Warrants and 488,041 Private Placement Warrants issued and outstanding. Each whole warrant entitles the holder
to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment as described
herein, at any time commencing 30 days after the completion of the initial Business Combination. In addition, if (x) the Company issues
additional shares of Class A common stock 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 share (with such issue price or effective
issue price to be determined in good faith by the Company and in the case of any such issuance to the Sponsor or its affiliates, without
taking into account any Founder Shares held by the initial stockholders 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 completion of the initial Business
Combination (net of redemptions), and (z) the volume-weighted average trading price of the shares of Class A common stock during the
20 trading day period starting on the trading day prior to the day on which the Company completes its initial Business Combination (such
price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest
cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price
will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
The warrants will expire at 5:00 p.m., New York
City time on the warrant expiration date, which is five years after the completion of the initial Business Combination or earlier upon
redemption or liquidation. On the exercise of any warrant, the warrant exercise price will be paid directly to the Company and not placed
in the Trust Account.
The Company will not be obligated to deliver
any shares of Class A common stock pursuant to the exercise for cash of a warrant and will have no obligation to settle such warrant
exercise unless a registration statement under the Securities Act with respect to the shares of Class A common stock underlying the warrants
is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations described below with
respect to registration. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock
upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to
be exempt from the registration or qualification requirements of the securities laws of the state of residence of the registered holder
of the warrants. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon
exercise of the Public Warrants has not been declared effective by the end of 60 business days following 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
shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided
by Section 3(a)(9) of the Securities Act.
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, the Company will use its best efforts
to file with the SEC a registration statement covering the issuance of the shares of Class A common stock issuable upon exercise of the
warrants and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed,
as specified in the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise
of the warrants is not effective by the 60th business 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. In addition to the above, if the Class A common stock is at the time of any exercise of a warrant not listed
on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of
the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless
basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required
to file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use its best 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 shares of Class A common stock equal to the quotient obtained
by dividing (x) the product of the number of shares of Class A common stock 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. The “fair
market value” as used in this paragraph shall mean the volume weighted average price of the Class A common stock 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
Once the warrants become exercisable, the Company
may redeem the outstanding warrants:
|
● |
in whole and not in part; |
|
|
|
|
● |
at a price of $0.01 per
warrant; |
|
|
|
|
● |
upon not less than 30 days’
prior written notice of redemption, or the 30-day redemption period, to each warrant holder; and |
|
|
|
|
● |
if, and only if, the last
sale price of the Class A common stock (or the closing bid price of the Class A common stock in the event the shares of
Class A common stock are not traded on any specific trading day) equals or exceeds $18.00 per share (as adjusted for stock splits,
stock dividends, reorganizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading
day before the Company sends the notice of redemption to the warrant holders. |
FTAC EMERALD ACQUISITION
CORP.
NOTES TO CONDENSED FINANCIAL
STATEMENTS
JUNE 30, 2023
(Unaudited)
NOTE 8. FAIR VALUE MEASUREMENTS
The following table presents information about
the Company’s assets that are measured at fair value on June 30, 2023 and December 31, 2022, and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value:
| |
June 30,
2023 | | |
Quoted Prices In Active
Markets (Level 1) | | |
Significant Other Observable
Inputs (Level 2) | | |
Significant Other Unobservable
Inputs (Level 3) | |
Asset: | |
| | |
| | |
| | |
| |
Investments held in Trust Account | |
$ | 258,300,436 | | |
$ | 258,300,436 | | |
$ | — | | |
$ | — | |
| |
December 31, 2022 | | |
Quoted Prices In Active
Markets (Level 1) | | |
Significant Other Observable
Inputs (Level 2) | | |
Significant Other Unobservable
Inputs (Level 3) | |
Asset: | |
| | |
| | |
| | |
| |
Investments held in Trust Account | |
$ | 254,251,750 | | |
$ | 254,251,750 | | |
$ | — | | |
$ | — | |
There were no transfers between Levels 1, 2 and
3 during the three and six months ended June 30, 2023 and 2022.
NOTE 9. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions
that occurred after the balance sheets date up to the date that the unaudited condensed financial statements were issued. Based upon
this review, other than stated below, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the unaudited condensed financial statements.
On July 25, 2023, the Company made an additional
draw on the Working Capital Loans for $100,000.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
References in this report (this “Quarterly
Report”) to “we,” “us” or the “Company” refer to FTAC Emerald Acquisition Corp. References
to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor”
refer collectively to Emerald ESG Sponsor, LLC and Emerald ESG Advisors, LLC. The following discussion and analysis of the Company’s
financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained
elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking
statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical
facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, the Company’s financial
position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such
as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek”
and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements
relate to future events or future performance, but reflect management’s current beliefs, based on information currently available.
A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed
in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially
from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s Annual Report
on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can
be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law,
the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company incorporated in
Delaware on February 19, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more target businesses. We intend to effectuate our business combination using
cash from the proceeds of our IPO and the sale of the private placement units that occurred simultaneously with the completion of our
IPO, our capital stock, debt or a combination of cash, stock and debt.
We expect to continue to incur significant costs
in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.
Results of Operations
We have neither engaged in any operations (other
than searching for a Business Combination after the Public Offering) nor generated any revenues to date. Our only activities from inception
through June 30, 2023 were organizational activities, those necessary to prepare for the Public Offering, described below, and, after
the Public Offering, identifying a target company for an initial Business Combination. We do not expect to generate any operating revenues
until after the completion of our Business Combination, at the earliest. We generate non-operating income in the form of interest income
on the marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial
reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2023, we
had net income of $1,727,575, which consisted of interest income earned on investments held in Trust Account of $3,052,686, offset by
formation and operating costs of $694,546 and provision for income taxes of $630,565.
For the six months ended June 30, 2023, we had
net income of $2,995,434, which consisted of interest income earned on investments held in Trust Account of $5,749,212, offset by formation
and operating costs of $1,567,443 and provision for income taxes of $1,186,335.
For the three months ended June 30, 2022, we
had a net loss of $88,770, which consisted of formation and operating costs of $383,532 and provision for income tax of $44,337, partially
offset by interest income earned on investments held in Trust Account of $339,099.
For the six months ended June 30, 2022, we had
a net loss of $553,033, which consisted of formation and operating costs of $873,036 and provision for income tax of $44,337, partially
offset by interest income earned on investments held in Trust Account of $364,340.
Liquidity and Capital Resources
On December 20, 2021, we consummated the Public
Offering of 22,000,000 units generating gross proceeds of $220,000,000. Each unit consists of one share of Class A common stock and one-half
of one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50
per share, subject to adjustment. On January 11, 2022, the underwriter partially exercised its over-allotment option, resulting in the
sale on January 14, 2022 of an additional 2,869,342 units for total gross proceeds of $28,693,420.
Simultaneously with the closing of the Public
Offering, we consummated the sale of 890,000 Private Placement Units at a price of $10.00 per Private Placement Unit in a private placement
to our Sponsor, generating gross proceeds of $8,900,000. On January 14, 2022, the underwriter partially exercised its over-allotment
option, resulting in the sale of an additional 86,081 Private Placement Units to our Sponsor for total gross proceeds of $860,810, bringing
the total aggregate gross proceeds of the Private Placement to $9,760,810.
We incurred $14,181,568 in IPO transaction costs,
including $4,973,868 of underwriting fees ($660,000 of which was reimbursed to us to pay the advisory fee due to CCM), $8,704,270 of
deferred underwriting fees and $503,430 of other offering costs.
Following the Public Offering, the partial exercise
of the over-allotment option, and the sale of the Private Placement Units, a total of $251,180,354 ($10.10 per Unit) was placed in the
Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting
certain conditions under Rule 2a-7 of the Investment Company Act, as determined by us, until the earlier of: (i) the consummation of
a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below.
As of June 30, 2023, we had $145,898 in cash
held outside of trust and a working capital deficit of $1,221,589, which excludes franchise tax payable and income tax payable. 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. The outstanding balance under the promissory
note of $105,260 was repaid on December 27, 2021 and the promissory note was terminated.
In order to finance transaction costs in connection
with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors may,
but are not obligated to, loan us funds as may be required (the “Working Capital Loans”). If we complete the initial Business
Combination, we expect to repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that the initial
Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned
amounts but no proceeds from the Trust Account would be used to repay such loaned amounts. The Sponsor has agreed to loan us up to an
aggregate principal amount of $1,500,000 under the Promissory Note (described in Note 5). At June 30, 2023 and December 31, 2022, $1,275,000
and $0 of such Working Capital Loans were outstanding, respectively.
As of June 30, 2023, we had cash, investments
and marketable securities held in the Trust Account of $258,300,436. We intend to use substantially all of the funds held in the Trust
Account, including any amounts representing interest earned on the Trust Account to complete our Business Combination. We may withdraw
interest to pay taxes. During the period ended June 30, 2023, we withdrew $1,700,526 of the interest income from the Trust Account to
pay franchise and income taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete
our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations
of the target business or businesses, make other acquisitions and pursue our growth strategies.
We intend to use the funds held outside the Trust
Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel
to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate
documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
However, if our estimate of the costs of identifying
a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary
to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to
obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number
of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in
connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing
simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not
have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following
our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Going Concern
In connection with the Company’s assessment
of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards
Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”
we have until September 20, 2023 to consummate a Business Combination. It is uncertain whether we will be able to consummate a Business
Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent
dissolution. We have determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and
potential subsequent dissolution raises substantial doubt about our ability to continue as a going concern. Management intends to consummate
a Business Combination prior to September 20, 2023. No adjustments have been made to the carrying amounts of assets or liabilities should
we be required to liquidate after September 20, 2023.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities,
which would be considered off-balance sheet arrangements as of June 30, 2023. We do not participate in transactions that create relationships
with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
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.
We entered into an administrative services agreement
pursuant to which we pay the Sponsor or its designee a monthly fee of $30,000 for office space, administrative and shared personnel support
services to the Company. We began incurring these fees on December 16, 2021 and will continue to incur these fees monthly until the earlier
of the completion of the Business Combination and our liquidation. For the six months ended June 30, 2023, we incurred $180,000 for the
administrative support services. As of June 30, 2023, $90,000 of the administrative support fees are in accrued expenses in the condensed
balance sheet.
The holders of the founder shares, private placement
units (including securities contained therein) and units that may be issued upon conversion of working capital loans (including securities
contained therein) will be entitled to registration rights pursuant to a registration rights agreement requiring us to register such
securities for resale (in the case of the founder shares, only after conversion to the Class A common stock). 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 the completion of the
initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities
Act.
We granted the underwriter of the Public Offering
a 45-day option to purchase up to 3,300,000 additional Units to cover over-allotments, if any, at the Public Offering price less the
underwriting discounts and commissions. On January 14, 2022, the underwriter purchased an additional 2,869,342 Units pursuant to the
over-allotment option.
The underwriter earned a cash underwriting discount
of two percent (2%) of the gross proceeds of the Units sold in the Public Offering and pursuant to the over-allotment option, or $4,973,868.
Additionally, the underwriter will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Units sold in
the Public Offering and pursuant to the over-allotment option, or $8,704,270. The deferred underwriting discount will become payable
to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to
the terms of the underwriting agreement.
We engaged Cohen & Company Capital Markets,
a division of J.V.B. Financial Group, LLC (“CCM”), to provide financial advisory services in connection with the Public Offering.
We paid CCM a fee in an amount equal to 0.3% of the aggregate proceeds of the Public Offering (excluding the proceeds of the exercise
of the over-allotment option) net of underwriter’s expenses, upon the closing of the Public Offering. We also intend to engage
CCM to act as an advisor in connection with the Business Combination for which it will earn an advisory fee of 0.525% of the proceeds
of the Public Offering (excluding the proceeds of the exercise of the over-allotment option) payable at closing of the Business Combination.
CCM will also be entitled to an advisory fee equal to 0.825% of the aggregate proceeds of the exercise of the over-allotment option,
payable at the closing of the Business Combination. CCM’s fees will be reimbursed to us by the underwriter as it becomes payable
out of the underwriting commission and will not result in any incremental fees to us. Accordingly, a reimbursement receivable and deferred
advisory fee of $1,155,000 has been reflected in the accompanying condensed balance sheets.
Critical Accounting Policies and Estimates
The preparation of the condensed financial statements
in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. We
have identified the following as our critical accounting policies:
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480,
“Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption is classified as a
liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features
redemption rights that are within the control of the holder or subject to redemption upon the occurrence of uncertain events not
solely within the Company’s control) is classified in temporary equity. At all other times, common stock is classified as
stockholders’ equity. Our Class A common stock sold in the IPO and over-allotment feature certain redemption rights that are
considered to be outside of our control and subject to the occurrence of uncertain future events. Accordingly, at June 30, 2023 and
December 31, 2022, 24,869,342 shares of Class A common stock are presented at redemption value as temporary equity, outside of the
stockholders’ deficit section of our unaudited condensed balance sheets.
We recognize changes in redemption value immediately
as they occur and adjust the carrying value of Class A common stock to equal the redemption value at the end of each reporting period.
Increases or decreases in the carrying amount of redeemable Class A common stock are affected by charges against additional paid in capital
and accumulated deficit. This method would view the end of the reporting period as if it were also the redemption date for the security.
Net Income (Loss) Per Common Share
We have two classes of shares, which are referred
to as Class A common stock and Class B common stock. Earnings and losses are shared pro rata between the two classes of shares. Accretion
associated with the redeemable shares of Class A common stock is excluded from earnings per share as the redemption value approximates
fair value. We have not considered the effect of the warrants in the calculation of diluted net income (loss) per share, if any, since
their exercise is contingent upon future events. As a result, diluted net income (loss) per share of common stock is the same as basic
net income (loss) per share of common stock. Accretion associated with the redeemable shares of Class A common stock is excluded from
earnings per share as the redemption value approximates the fair value.
Recent Accounting Standards
In August 2020, the FASB issued ASU No. 2020-06,
“Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s
Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU
2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception,
and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for fiscal years beginning
after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. We are currently assessing
the impact, if any, that ASU 2020-06 would have on our financial position, results of operations or cash flows.
Management does not believe that any other recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Item 3. Quantitative and Qualitative Disclosures
About Market Risk
Not required for smaller reporting companies.
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 chief executive officer and chief financial 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. Based
upon that evaluation, our Certifying Officers concluded that as of June 30, 2023, our disclosure controls and procedures were effective.
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
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
Factors that could cause our actual results to
differ materially from those in this Quarterly Report include the risk factors described in our Annual Report on Form 10-K filed with
the SEC. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report
on Form 10-K filed with the SEC.
Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds.
On December 20, 2021, we consummated the Public
Offering of 22,000,000 Units. The Units were sold at an offering price of $10.00 per unit, generating total gross proceeds of $220,000,000.
Goldman Sachs & Co. LLC served as the sole book-running manager for the Public Offering. The securities in the Public Offering were
registered under the Securities Act on a registration statement on Form S-1 (No. 333-261254). The SEC declared the registration statement
effective on December 15, 2021.
Simultaneously with the consummation of the Public
Offering, the Company consummated the private placement of an aggregate of 890,000 Private Placement Units to the Sponsor at a price
of $10.00 per unit, generating total proceeds of $8,900,000. Each placement unit consists of one placement share and one-half of one
private placement warrant to purchase one share of our Class A common stock exercisable at $11.50, subject to adjustment. The issuance
was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
The Private Placement Warrants are identical
to the warrants underlying the Units sold in the Public Offering, except that the Private Placement Warrants are not transferable, assignable
or salable until after the completion of a Business Combination, subject to certain limited exceptions.
On January 11, 2022, the underwriter partially
exercised its over-allotment option, resulting in the sale of an additional 2,869,342 Units for gross proceeds of $28,693,420. In connection
with the underwriter’s partial exercise of its over-allotment option, the Company also consummated the sale of an additional 86,081
Private Placement Units to the Sponsor at $10.00 per Private Placement Unit, generating total proceeds of $860,810. The issuance of the
Private Placement Units was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
Of the gross proceeds received from the Public
Offering, the exercise of the over-allotment option and the sale of the Private Placement Units, an aggregate of $251,180,354 was placed
in the Trust Account.
We paid a total of $4,973,868 in underwriting
discounts and commissions and $503,430 for other costs and expenses related to the Public Offering. In addition, the underwriter agreed
to defer $8,704,270 in underwriting discounts and commissions (which is currently held in the Trust Account), which will be payable only
upon consummation of an initial business combination.
For a description of the use of the proceeds
generated in our Public Offering, see Part I, Item 2 of this Form 10-Q.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
Item 6. Exhibits
The following exhibits are filed as part of,
or incorporated by reference into, this Quarterly Report on Form 10-Q.
SIGNATURES
In accordance with the
requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
FTAC
EMERALD ACQUISITION CORP. |
|
|
|
Date:
August 9, 2023 |
By: |
/s/
Bracebridge H. Young, Jr. |
|
Name: |
Bracebridge H. Young, Jr. |
|
Title: |
President and Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
|
Date:
August 9, 2023 |
By: |
/s/
Doug Listman |
|
Name: |
Doug Listman |
|
Title: |
Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
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I, Bracebridge H. Young, Jr., certify that:
In connection with the Quarterly Report of FTAC
Emerald Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the Securities
and Exchange Commission (the “Report”), I, Bracebridge H. Young, Jr., President and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my
knowledge:
In connection with the Quarterly Report of FTAC
Emerald Acquisition Corp. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2023, as filed with the Securities
and Exchange Commission (the “Report”), I, Doug Listman, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge: