Organization, Business Operations and Going Concern |
Note 1 — Organization, Business Operations and Going Concern
Organization and General
Disruptive Acquisition Corporation I (the “Company”) was incorporated as a Cayman Islands exempted company on December 29, 2020. The Company was incorporated
for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company has not selected any specific
Business Combination target and the Company has not, nor has anyone on its behalf, engaged in any substantive discussions, directly or indirectly, with any Business Combination target with respect to the Business Combination.
As of June 30, 2023, the Company had not yet commenced any operations. All activity for the year ended June 30, 2023, relates to the Company’s formation and its
initial public offering (the “Initial Public Offering”) described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company has generated in the past
and expects to generate in the future non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end.
Financing
The registration statement for the Company’s Initial Public Offering was declared effective on March 23, 2021 (the “Effective Date”). On March 26, 2021, the
Company consummated the Initial Public Offering of 25,000,000 units (the “Units”). Each Unit consists of one Class A ordinary share of the Company, par value $0.0001 per share (the “Class A Ordinary Shares”), and one-third of one redeemable warrant of the Company (the “Public Warrants”), each whole Public Warrant entitling the holder thereof to purchase one Class A Ordinary Share for $11.50
per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $250,000,000.
Substantially concurrently with the closing of the Initial Public Offering, the Company completed the private sale (the “Private Placement”)
of 4,666,667 warrants (the “Private Placement Warrants,” and together with the Public Warrants, the “Warrants”) to Disruptive Acquisition Sponsor I, LLC (the “Sponsor”) at a purchase price of $1.50
per Private Placement Warrant, generating gross proceeds to the Company of $7,000,000.
In connection with the Initial Public Offering, the underwriters were granted a 45-day option from the date of the prospectus (the “Over-Allotment Option”) to purchase up to 3,750,000 additional units to cover over-allotments (the “Option Units”), if any. On May 5, 2021, the underwriters purchased an additional 2,500,000 Option Units pursuant to the partial exercise of the Over-Allotment Option. The Option Units were sold at an offering price of $10.00 per Unit, generating additional gross proceeds to the Company of $25,000,000. Also in connection with the partial exercise of the Over-Allotment Option, the Sponsor purchased an additional 333,333 Private Placement Warrants at a purchase price of $1.50 per Warrant, generating gross
proceeds to the Company of $500,000.
Trust Account
Following the closing of the Initial Public Offering on March 26, 2021, an
amount of $250,000,000 from the net proceeds of the sale of the Units in the Initial Public
Offering has been placed in a trust account (the “Trust Account”). On May 6, 2021, in connection with the partial exercise of the Over-Allotment Option, an additional $25,000,000 from the net proceeds of the sale of the Option Units was placed in the Trust Account, for an aggregate of $275,000,000 of net proceeds placed in the Trust Account. The proceeds are invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund
meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its tax obligations, the
proceeds from the Initial Public Offering and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (a)
the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the
redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from
the closing of the Initial Public Offering, subject to applicable law. 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 Company’s public shareholders.
On February 14, 2023, the Company held an extraordinary meeting of its shareholders (the “Extraordinary Meeting”). At the Extraordinary Meeting, the Company’s
shareholders approved, among other things, an amendment to the Company’s amended and restated memorandum and articles of association to extend the date that the Company has to consummate an initial Business Combination from March 26, 2023 to
March 26, 2024 and such earlier date as shall be determined by the Company’s board of directors and publicly announced by the Company. In connection with the shareholders’ vote at the Extraordinary Meeting, the holders of 25,790,900 public shares properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.20 per share, for an aggregate redemption amount of $263,071,274.
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public
Offering, although substantially all of the net proceeds are intended to be generally applied toward consummating a business combination.
The Company must complete one
or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account
(excluding the deferred underwriting discount and taxes payable) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act. There is no assurance that the Company will be able to complete a Business Combination successfully.
Upon the closing of the Initial Public Offering, management has agreed that an amount equal to at least $10.00 per Unit sold in the Initial Public Offering, including the proceeds of the Private Placement
Warrants, will be held in the Trust Account and will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which
invest only in direct U.S. government treasury obligations. The Company will not be permitted to withdraw any of the principal or interest held in the Trust Account, except for the withdrawal of interest to pay the Company’s taxes and up to $100,000 to pay dissolution expenses, as applicable, if any, until the earliest of (i) the completion of the initial Business Combination, (ii) the
redemption of the public shares if the Company is unable to complete the initial Business Combination within 24 months from the
closing of the Initial Public Offering (as such period may be extended pursuant to a shareholder vote, the “Combination Period”), subject to applicable law, or (iii) the redemption of the public
shares properly submitted in connection with a shareholder vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow
redemption in connection with the initial Business Combination or to redeem 100% of the public shares if the Company has not
consummated the initial Business Combination within the Combination Period or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial business combination activity. On February 14, 2023, the Company held
the Extraordinary Meeting. At the Extraordinary Meeting, the Company’s shareholders approved, among other things, an amendment to the Company’s amended and restated memorandum and articles of association to extend the date that the Company has to
consummate an initial Business Combination from March 26, 2023 to March 26, 2024 or such earlier date as shall be determined by the Company’s board of directors and publicly announced by the Company (the “Extension Vote”). In connection with the
shareholders’ vote at the Extraordinary Meeting, the holders of 25,790,900 public shares properly exercised their right to redeem
their shares for cash at a redemption price of approximately $10.20 per share, for an aggregate redemption amount of $263,071,274.
The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Class A Ordinary Shares upon the completion of the initial
Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) without a shareholder vote by means of a tender offer. The decision as to whether the Company will seek shareholder approval
of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then
on deposit in the Trust Account calculated as of two business days prior to the consummation of the initial Business Combination,
including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the taxes, divided by the number of then outstanding public shares. The per share amount the Company will distribute to investors
who properly redeem their shares will not be reduced by the deferred underwriting discount the Company will pay to the underwriters of the Initial Public Offering.
The Class A ordinary shares subject to redemption are recorded at a redemption value and were classified as temporary equity upon the completion of the Initial Public Offering, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” In such
case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such
consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
Following the Extension Vote, the Company has until March 26, 2024 (as the same may be further
extended pursuant to a shareholder vote) to complete the initial Business Combination. However, if the Company is unable to complete the initial Business Combination within the Combination Period, the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less tax payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish
public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law and (iii) as promptly as reasonably possible following such redemption, subject to the approval of
the Company’s remaining shareholders and the Company’s board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii), to the Company’s obligations under Cayman Islands law to provide for claims of creditors and in all
cases subject to the other requirements of applicable law.
The Sponsor, officers and directors have agreed, pursuant to a letter agreement with the Company, to (i) waive their redemption rights with respect to their Founder
Shares (as described in Note 6) and public shares in connection with the completion of the initial Business Combination, (ii) waive their redemption rights with respect to their Founder Shares and public shares in connection with a shareholder
vote to approve an amendment to the Company’s amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or
to redeem 100% of its public shares if the Company has not consummated an initial Business Combination within the Combination Period
or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity; (iii) waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares
if the Company fails to complete the initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails
to complete the initial Business Combination within the Combination Period and (iv) vote any Founder Shares held by them and any public shares purchased during or after the Initial Public Offering
(including in open market and privately-negotiated transactions) in favor of the initial Business Combination.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than Marcum LLP, the Company’s independent
auditor) for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar agreement or Business Combination agreement,
reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per public share and (ii) the actual amount per
public share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per share due to
reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust
Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor
has sufficient funds to satisfy its indemnity obligations and the Company believes that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure that the Sponsor would be able to satisfy those obligations.
None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
Liquidity and Going Concern
As of June 30, 2023, the Company had cash outside the Trust Account of $27,426
available for working capital needs. All remaining cash held in the Trust Account are generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem
ordinary shares. As of June 30, 2023, none of the amount in the Trust Account was available to be withdrawn as described above.
Until the
consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for
travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination. The Company may need to raise additional capital through loans or additional investments from its Sponsor,
shareholders, officers, directors, or third parties. The Company’s Sponsor, officers and directors may, but are not obligated to, loan the Company funds from time to time or at any time, in whatever amount they deem reasonable in their sole
discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve
liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.
On
November 15, 2021, the Company issued an unsecured promissory note (the “Note”) in the amount of up to $250,000 to an
affiliate of the Sponsor. The proceeds of the Note, which may be drawn down from time to time until the Company consummates its initial Business Combination, will be used for general working capital purposes. The Note bears no interest and is
payable in full upon the earlier to occur of (i) twenty-four (24) months from the closing of the Initial Public Offering (or such later date as may be extended in accordance with the terms of the Company’s amended and restated
memorandum and articles of association) or (ii) the consummation of the initial Business Combination. A failure to pay the principal within five
business days of the date specified above or the commencement of a voluntary or involuntary bankruptcy action shall be deemed an event of default, in which case the Note may be accelerated. On April 12, 2022, the Company amended and restated the Note in its entirety to increase
the Note’s principal amount to $500,000. On August 18, 2022, the Company further amended and restated the Note in its entirety to increase the Note’s
principal amount to $750,000. On April 17, 2023, the Note was further amended and restated to increase its principal amount to $1,500,000. As of June 30, 2023 and December 31, 2022, the Company had $1,500,000 and $750,000 borrowings outstanding under the Note, respectively. On August 14, 2023, the Company again amended and restated the Note to increase its principal amount to $2,500,000.
If the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating a Business Combination are less than the
actual amounts necessary to do so, the Company may have insufficient funds available to operate its business prior to the consummation of its Business Combination and may need to raise additional capital, e.g., through loans from its Sponsor,
officers, directors or third parties. If the Company is unable to raise additional capital, it may be required to take additional measures to preserve liquidity, which could include, but not necessarily be limited to, curtailing operations,
suspending the pursuit of its business plan and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. The Company cannot assure you that
its plans to raise capital or to consummate an initial Business Combination before March 26, 2024 (absent any further extensions of such period with shareholder approval) will be successful.
In addition, the
Company only has until March 26, 2024 (as such period may be further extended pursuant to a shareholder vote) to complete its initial Business Combination. If the Company has not completed its initial Business Combination within this
Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the public shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest
earned on the funds held in the Trust Account (less taxes payable and up to $100,000 of interest to pay dissolution expenses),
divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable
law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, and subject to the Company’s obligations under
Cayman Islands law, in the case of clauses (ii) and (iii), provide for claims of creditors and in all cases subject to the other requirements of applicable law. There will be no redemption rights or liquidating distributions with respect to the
Company’s warrants, which will expire worthless if the Company does not complete its initial Business Combination within the Combination Period.
Management has
determined that the Company could have insufficient liquidity to meet its anticipated obligations for at least twelve months after the financial statements are available to be issued due to recurring operating losses and negative cash
utilized in operating activities. The Company may need to raise additional capital through loans or additional investments from its Sponsor, shareholders, officers, directors or third parties as needed. The Company’s officers, directors and
Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not
be able to obtain additional financing. The Company cannot provide any assurance that new financing will be available to it on acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a
going concern.
In connection
with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic 205-40, “Presentation of Financial Statements—Going Concern,” management has also determined that the mandatory liquidation date and subsequent
dissolution raises substantial doubt about the Company’s ability to continue as a going concern. If the Company is unable to complete its Initial Business Combination by March 26, 2024 (unless such a period is extended as described herein),
then the Company will cease all operations except for the purpose of liquidating. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after March 26, 2024.
Risks and Uncertainties
Management continues to evaluate
the impact of the COVID-19 pandemic and Russia-Ukraine war on the industry and has concluded that while it is reasonably possible that the virus and the Russia-Ukraine war could have a negative effect on the Company’s financial position,
results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these unaudited condensed financial statements. The unaudited condensed financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
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