NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(As Restated - See Note
2)
Note 1 - Description of Organization, Business
Operations and Going Concern
Quadro Acquisition One Corp. (the “Company”,
formerly known as Kismet Acquisition Two Corp.) is a blank check company incorporated as a Cayman Islands exempted company on September
15, 2020. The Company was incorporated for the purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation,
contractual control arrangement with, purchasing all or substantially all of the assets of, or engaging in any other similar initial
business combination with one or more businesses or entities that the Company has not yet identified (“Business Combination”).
In February 2023, the Company held the extraordinary general meeting for the purposes of approving the extension amendment and the Company’s
name change from Kismet Acquisition Two Corp. to Quadro Acquisition One Corp.
As of September 30, 2022, the Company had not
yet commenced operations. All activity for the period from September 15, 2020 (inception) through September 30, 2022, relates to the Company’s
formation and the initial public offering (the “Initial Public Offering” or “IPO”), which is described below,
and since the Initial Public Offering, the search for a potential target. The Company will not generate any operating revenues until after
the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest
income on investments held in Trust Account (as defined below) from the proceeds derived from the Initial Public Offering and the sale
of the Private Placement Warrants (as defined below).
The Company’s sponsor was Kismet Sponsor
Limited, a British Virgin Islands company (the “Prior Sponsor”). The Registration Statement for the Initial Public Offering
on Form S-1 initially filed with the U.S. Securities and Exchange Commission (“SEC”) on January 26, 2021, as amended (File
No. 333- 252419), was declared effective on February 17, 2021 (the “Registration Statement”). On February 22, 2021, the Company
consummated its Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A Ordinary Shares
included in the Units sold, the “Public Shares”), including 3,000,000 additional Units to cover over-allotments (the “Over-Allotment
Units”), at $10.00 per Unit, generating gross proceeds of $230.0 million, and incurring offering costs of approximately $13.1 million,
of which approximately $8.1 million was for deferred underwriting commissions (see Note 7).
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the private placement (“Private Placement”) of 4,400,000 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant
with the Prior Sponsor, generating gross proceeds of $6.6 million, and incurring offering costs of approximately $7,000 (see Note 5).
On June 15, 2022, the Prior Sponsor transferred
6,250,000 Class B Ordinary Shares and 4,400,000 Private Placement Warrants held by the Prior Sponsor to Quadro Sponsor LLC, a Delaware
limited liability company and wholly owned subsidiary of the Prior Sponsor (the “New Sponsor” or “Sponsor”).
On June 30, 2022, the Prior Sponsor transferred all the membership interests of the New Sponsor to Quadro IH DMCC (“Quadro”),
a company registered in Dubai Multi Commodities Centre in the United Arab Emirates (the “Sponsor Transaction”). In connection
with the Sponsor Transaction, the Prior Sponsor also assigned to the New Sponsor all of its rights and obligations under the (i) Letter
Agreement, dated as of February 17, 2021, (ii) Registration Rights Agreement (as defined in Note 6) and (iii) Promissory Note (as defined
below). In addition, the Company and Kismet Capital Group LLC (“Kismet LLC”) mutually terminated the Administrative Services
Agreement dated February 17, 2021 (the “Administrative Services Agreement”). As a result, the Company is no longer obligated
to pay a $10,000 monthly fee to Kismet LLC pursuant to the Administrative Services Agreement.
Upon the closing of the Initial Public Offering
and the Private Placement, $230.0 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering and certain of the proceeds
of the Private Placement were placed in a trust account (“Trust Account”) with Continental Stock Transfer & Trust Company
(“Continental”) acting as trustee and invested in U.S. government treasury obligations with a maturity of 185 days or less
or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940 (the “Investment Company
Act”), which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of (i)
the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
The Company’s management has broad discetion
with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants,
although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. The Company’s
initial Business Combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of
the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable, if any, on the income accrued
on the Trust Account) at the time the Company signs a definitive agreement in connection with the initial Business Combination. However,
the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding
voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register
as an investment company under the Investment Company Act.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
The Company will provide its holders of the Public
Shares (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion
of a Business Combination either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means
of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender
offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for
a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per share, plus any pro rata interest
earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount
to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions
the Company will pay to the underwriters (see Note 7). These Public Shares were recorded at a redemption value and classified as temporary
equity upon the completion of the Initial Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”).
In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon
such consummation of a Business Combination and a majority of the shares are voted in favor of the Business Combination. If a shareholder
vote is not required by law and the Company does not decide to hold a shareholder vote for business or other legal reasons, the Company
will, pursuant to the amended and restated memorandum and articles of association which were adopted by the Company upon the consummation
of the Initial Public Offering (the “Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender
offer rules of the SEC, and file tender offer documents with the SEC prior to completing a Business Combination. If, however, a shareholder
approval of the transactions is required by law, or the Company decides to obtain shareholder approval for business or legal reasons,
the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the
tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of whether they vote for
or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the holder
of the Founder Shares (as defined in Note 6) prior to the Initial Public Offering (the “Initial Shareholder”) agreed to vote
its Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination. In
addition, the Initial Shareholder agreed to waive its redemption rights with respect to their Founder Shares and Public Shares in connection
with the completion of a Business Combination
Notwithstanding the foregoing, the Memorandum
and Articles of Association provides that a Public Shareholder, together with any affiliate of such shareholder or any other person with
whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate
of 20% or more of the Class A Ordinary Shares sold in the Initial Public Offering, without the prior consent of the Company.
The Company’s Sponsor, executive officers,
directors and director nominees agreed not to propose an amendment to the Memorandum and Articles of Association that would affect the
substance or timing of the Company’s obligation to provide for the redemption of its Public Shares in connection with a Business
Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides
the Public Shareholders with the opportunity to redeem their Class A Ordinary Shares in conjunction with any such amendment.
If the Company is unable to complete a Business
Combination by April 22, 2023 (or November 22, 2023 if the Company fully extends the time to complete a Business Combination, the “Combination
Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem all Public Shares then outstanding at a per-share price, payable in cash, equal
to the aggregate amount then on deposit in the Trust Account, including any amounts representing interest earned on the Trust Account,
less any interest released to the Company for the payment of taxes, if any (and less up to $100,000 in interest reserved for expenses
in connection with the Company’s dissolution), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any),
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the
Company’s board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations
under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS
In connection with the redemption of 100% of the
Company’s outstanding Public Shares for a portion of the funds held in the Trust Account, each holder will receive a full pro rata
portion of the amount then in the Trust Account, plus any pro rata interest earned on the funds held in the Trust Account and not previously
released to the Company to pay the Company’s taxes payable (less up to $100,000 of interest to pay dissolution expenses).
The Initial Shareholder agreed to waive its liquidation rights with
respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Initial
Shareholder should acquire Public Shares in or after the Initial Public Offering, it will be entitled to liquidating distributions from
the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period.
The underwriters agreed to waive their rights to their deferred underwriting commission (see Note 7) held in the Trust Account in the
event the Company does not complete a Business Combination within the Combination Period, and, in such event, such amounts will be included
with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will
be only $10.00 per share initially held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor agreed
that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company,
or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or other similar
agreement or business combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public
Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if
less than $10.00 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not
apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in
the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the
underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended
(the “Securities Act”). In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor
will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that
the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have vendors, service providers (except
the Company’s independent registered public accounting firm), prospective target businesses or other entities with which the Company
does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the
Trust Account.
Liquidity and Going Concern
As of September 30, 2022, the Company had $986
in its operating bank account and working capital deficit of approximately $271,000.
The Company’s liquidity needs to date have
been satisfied through a contribution of $25,000 from the Prior Sponsor to cover certain expenses in exchange for the issuance of the
Founder Shares, a loan of approximately $111,000 from the Prior Sponsor pursuant to the IPO Note (as defined in Note 6), and a portion
of the proceeds from the consummation of the Private Placement not held in the Trust Account. The Company repaid the IPO Note in full
on February 24, 2021. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an
affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company
Working Capital Loans (as defined in Note 6). As of September 30, 2022 and December 31, 2021, there were no amounts outstanding under
any Working Capital Loans.
On April 13, 2022, the Company issued an unsecured
promissory note in the amount of up to $200,000 to the Prior Sponsor (the “Promissory Note”). On May 25, 2022, the Company
and the Prior Sponsor amended the Promissory Note agreement and increased the principal amount to $400,000. The Promissory Note bears
no interest and is due and payable within one year from the date of the first drawdown of the amended and restated note, or June 7, 2023.
On June 30, 2022, the Prior Sponsor assigned all of its rights and obligations under the Promissory Note to the New Sponsor in connection
with the Sponsor Transaction. As of September 30, 2022, the Company has drawn $319,000 under the Promissory Note.
QUADRO ACQUISITION
ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
The Company may need to raise additional capital
through loans or additional investments from its Sponsor, its officers or directors or their affiliates. The Company’s officers,
directors and Sponsor, or their affiliates, may, but are not obligated to, loan the Company funds, from time to time or at any time,
in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the
Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take
additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending
the pursuit of a potential transaction, reducing overhead expenses, and extending the terms and due dates of certain accrued expenses
and other liabilities. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable
terms, if at all. In connection with the Company’s assessment of going concern considerations in accordance with FASB ASC Topic
205-40, “Presentation of Financial Statements - Going Concern” (“ASC 205-40”), management has determined that
the liquidity condition, mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability
to continue as a going concern. Management continues to seek to complete a Business Combination prior to the mandatory liquidation date.
No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after April
22, 2023. The accompanying unaudited condensed financial statements do not include any adjustment that might be necessary if the Company
is unable to continue as a going concern.
Note 2 – Restatement of Previously Issued Financial Statements
The Company had recognized a liability upon
closing of their initial public offering in February 2021 for a portion of the underwriter’s commissions which was contingently
payable upon closing of a future business combination, with the offsetting entry resulting in an initial discount to the securities sold
in the initial public offering. During the three and nine months ended September 30, 2022, two of the underwriters in the Company’s
initial public offering waived their rights to receive aggregate approximately $5.2 million deferred underwriting discount under the
underwriting agreement. The Company recognized the waiver as an extinguishment, with a resulting non-operating gain recognized in its
statements of operations for the three and nine months ended September 30, 2022. Upon subsequent review and analysis, management concluded
that the Company should have recognized the portion allocated to Public Shares of approximately $5.0 million as an adjustment to the
carrying value of the Class A ordinary shares subject to possible redemption and the remaining balance of approximately $0.2 million
as a gain from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities.
Therefore, the Company’s management and
the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) concluded that the Company’s
previously issued interim financial statements as of September 30, 2022 (the “Quarterly Report”) should no longer be relied
upon and that it is appropriate to restate the Quarterly Report. As such, the Company restates its financial statements in this Form
10-Q/A. The previously filed financial statements for the three and nine months ended September 30, 2022, as filed with the Securities
and Exchange Commission (“SEC”) on November 14, 2022 (the “Original Filing”) should no longer be relied upon.
QUADRO ACQUISITION
ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Impact of the Restatement
The impact of the restatement on the statements
of operations, statements of changes in shareholders’ deficit and statements of cash flows for the affected period is presented
below. The restatement had no impact on net cash flows from operating, investing or financing activities.
Statement
of Operations:
| |
For the Three Months Ended
September 30, 2022 | |
| |
As Previously Reported | | |
Adjustment | | |
As Restated | |
Unaudited Condensed Statement of Operations | |
| | |
| | |
| |
Loss from Operations | |
$ | (163,271 | ) | |
$ | - | | |
$ | (163,271 | ) |
Change in fair value of derivative assets and liabilities | |
| 165,928 | | |
| - | | |
| 165,928 | |
Gain from settlement of deferred underwriting commissions
allocated to derivative warrant liabilities | |
| 5,232,500 | | |
| (5,077,217 | ) | |
| 155,283 | |
Income from investments held
in Trust Account | |
| 1,015,575 | | |
| - | | |
| 1,015,575 | |
Net income | |
$ | 6,250,732 | | |
$ | (5,077,217 | ) | |
$ | 1,173,515 | |
| |
| | | |
| | | |
| | |
Weighted average shares outstanding of Class A ordinary shares, basic and diluted | |
| 23,000,000 | | |
| - | | |
| 23,000,000 | |
Basic and diluted net income per share, Class A ordinary shares | |
$ | 0.21 | | |
$ | (0.17 | ) | |
$ | 0.04 | |
Weighted average shares outstanding of Class B ordinary shares, basic and diluted | |
| 6,250,000 | | |
| - | | |
| 6,250,000 | |
Basic and diluted net income per share, Class B ordinary shares | |
$ | 0.21 | | |
$ | (0.17 | ) | |
$ | 0.04 | |
| |
For the Nine Months Ended
September 30, 2022 | |
| |
As Previously Reported | | |
Adjustment | | |
As Restated | |
Unaudited Condensed Statement of Operations | |
| | |
| | |
| |
Loss from Operations | |
$ | (463,167 | ) | |
$ | - | | |
$ | (463,167 | ) |
Change in fair value of derivative assets and liabilities | |
| 5,283,010 | | |
| - | | |
| 5,283,010 | |
Gain from settlement of deferred underwriting commissions
allocated to derivative warrant liabilities | |
| 5,232,500 | | |
| (5,077,217 | ) | |
| 155,283 | |
Income from investments held
in Trust Account | |
| 1,328,327 | | |
| - | | |
| 1,328,327 | |
Net income | |
$ | 11,380,670 | | |
$ | (5,077,217 | ) | |
$ | 6,303,453 | |
| |
| | | |
| | | |
| | |
Weighted average shares outstanding of Class A ordinary shares, basic and diluted | |
| 23,000,000 | | |
| - | | |
| 23,000,000 | |
Basic and diluted net income per share, Class A ordinary shares | |
$ | 0.39 | | |
$ | (0.17 | ) | |
$ | 0.22 | |
Weighted average shares outstanding of Class B ordinary shares, basic and diluted | |
| 6,250,000 | | |
| - | | |
| 6,250,000 | |
Basic and diluted net income per share, Class B ordinary shares | |
$ | 0.39 | | |
$ | (0.17 | ) | |
$ | 0.22 | |
QUADRO ACQUISITION
ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Statement of Changes in Stockholders’ Deficit:
| |
| | |
| | |
Accumulated Deficit | | |
| |
| |
Class B Ordinary Shares | | |
Additional Paid-In | | |
As Previously | | |
Restatement | | |
As | | |
Total
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Reported | | |
Adjustment | | |
Restated | | |
Deficit | |
Balance - June 30, 2022 (unaudited) | |
| 6,250,000 | | |
$ | 6,250 | | |
$ | - | | |
$ | (8,890,830 | ) | |
$ | - | | |
$ | (8,890,830 | ) | |
$ | (8,884,580 | ) |
Adjustment for accretion of Class A ordinary shares
subject to possible redemption amount | |
| - | | |
| - | | |
| - | | |
| (1,015,575 | ) | |
| 5,077,217 | | |
| 4,061,642 | | |
| 4,061,642 | |
Net income | |
| - | | |
| - | | |
| - | | |
| 6,250,732 | | |
| (5,077,217 | ) | |
| 1,173,515 | | |
| 1,173,515 | |
Balance - September 30, 2022
(unaudited) | |
| 6,250,000 | | |
$ | 6,250 | | |
$ | - | | |
$ | (3,655,673 | ) | |
$ | - | | |
$ | (3,655,673 | ) | |
$ | (3,649,423 | ) |
Statement of Cash Flows:
| |
For the Nine Months Ended
September 30, 2022 | |
| |
As Previously Reported | | |
Adjustment | | |
As Restated | |
Unaudited Condensed Statement of Cash Flows: | |
| | |
| | |
| |
Net income | |
$ | 11,380,670 | | |
$ | (5,077,217 | ) | |
$ | 6,303,453 | |
Adjustments to reconcile net income to net cash used
in operating activities: | |
| | | |
| | | |
| | |
Change in fair value of derivative assets and liabilities | |
| (5,283,010 | ) | |
| - | | |
| (5,283,010 | ) |
Gain from extinguishment of deferred underwriting commissions
allocated to derivative warrant liabilities | |
| (5,232,500 | ) | |
| 5,077,217 | | |
| (155,283 | ) |
Unrealized gain from investments held in Trust Account | |
| (1,328,327 | ) | |
| - | | |
| (1,328,327 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | | |
| | |
Prepaid expenses | |
| 193,815 | | |
| - | | |
| 193,815 | |
Accounts payable | |
| 23,617 | | |
| - | | |
| 23,617 | |
Accounts payable - related party | |
| (17,321 | ) | |
| - | | |
| (17,321 | ) |
Accrued expenses | |
| (48,334 | ) | |
| - | | |
| (48,334 | ) |
Net cash used in operating activities | |
| (311,390 | ) | |
| - | | |
| (311,390 | ) |
Net cash provided by financing activities | |
| 248,700 | | |
| - | | |
| 248,700 | |
Net change in cash | |
$ | (62,690 | ) | |
$ | - | | |
$ | (62,690 | ) |
Supplemental disclosure of noncash activities: | |
| | | |
| | | |
| | |
Extinguishment of deferred underwriting commissions allocated to public shares | |
$ | - | | |
$ | 5,077,217 | | |
$ | 5,077,217 | |
QUADRO ACQUISITION
ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL
STATEMENTS
Note 3 - Basis of Presentation and Summary
of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed financial
statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”)
for financial information and pursuant to the rules and regulations of the SEC. Accordingly, certain disclosures included in the annual
financial statements have been condensed or omitted from the accompanying unaudited condensed financial statements as they are not required
for interim financial statements under GAAP and the rules of the SEC. In the opinion of management, the accompanying unaudited condensed
financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the
balances and results for the periods presented. Operating results for the three and nine months ended September 30, 2022 are not necessarily
indicative of the results that may be expected through December 31, 2022 or any future period.
The accompanying unaudited condensed financial
statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form
10-K for the fiscal year ended December 31, 2021, as filed by the Company with the SEC on March 31, 2022 (the “2021 Annual Report”).
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),
and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that
are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting
firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation
in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive
compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging
growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company,
as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the accompanying unaudited condensed financial statements with another public company that is neither an emerging
growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because
of the potential differences in accounting standards used.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Use of Estimates
The preparation of the accompanying unaudited
condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial
statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the accompanying unaudited condensed financial statements, which management considered in formulating its
estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates
included in the accompanying unaudited condensed financial statements is the determination of the fair value of the derivative assets
and liabilities. Accordingly, the actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of September
30, 2022 and December 31, 2021.
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000, and investments held in Trust Account. The Company has not experienced losses
on these accounts, and management believes the Company is not exposed to significant risks on such accounts.
Investments Held in the Trust Account
The Company’s portfolio of investments held
in the Trust Account is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company
Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally
have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised
of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the
Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in
money market funds are presented on the accompanying condensed balance sheets at fair value at the end of each reporting period. Gains
and losses resulting from the change in fair value of these securities are included in unrealized gain from investments held in Trust
Account in the accompanying unaudited condensed statements of operations. The estimated fair values of investments held in the Trust Account
are determined using available market information.
Fair Value of Financial Instruments
The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements, equals or approximates
the carrying amounts represented in the accompanying condensed balance sheets because of the short-term nature of the instruments or because
the instruments are recognized at fair value.
QUADRO
ACQUISITION ONE CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair Value Measurements
“Fair value” is defined as “the
price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants
at the measurement date.” GAAP establishes a three-tier fair value hierarchy, which prioritizes inputs used in measuring fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements)
and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
|
● |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
|
● |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
|
● |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure
fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is
categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Assets and Liabilities
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including
issued warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to
ASC 480 and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The Company accounts for its warrants issued
in connection with its Initial Public Offering, the Private Placement Warrants and units that may be issued in connection with the Forward
Purchase Agreement (as defined in Note 6) (the “Forward Purchase Units”) as derivative assets/liabilities in accordance with
ASC 815. Accordingly, the Company recognizes the instruments as assets/liabilities at fair value and adjusts the instruments to fair
value at the end of each reporting period. The assets/liabilities are subject to re-measurement at each balance sheet date until exercised,
and any change in fair value is recognized in the accompanying unaudited condensed statements of operations. The fair value of warrants
issued in connection with the Initial Public Offering was initially measured using a Monte-Carlo simulation and has subsequently been
measured on the market price of such warrants at each measurement date when separately listed and traded. The fair value of the Private
Placement Warrants was initially measured using a Black-Scholes Option Pricing Model and subsequently using the public market value of
the warrants issued in connection with its Initial Public Offering. The fair value of the Forward Purchase Units has been measured using
John C. Hull’s Options, Futures, and Other Derivatives model at each measurement date.
Offering Costs Associated with the Initial
Public Offering
Offering costs consisted of legal, accounting,
underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering.
Offering costs are allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value
basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities are expensed as incurred, presented
as non-operating expenses in the condensed statements of operations. Offering costs associated with the Class A Ordinary Shares were charged
against the carrying value of the Class A Ordinary Shares upon the completion of the Initial Public Offering. The Company classifies deferred
underwriting commissions as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets
or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible
Redemption
The Company accounts for its Class A Ordinary
Shares subject to possible redemption in accordance with the guidance in ASC 480. Class A Ordinary Shares subject to mandatory redemption
(if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A Ordinary Shares (including
Class A Ordinary Shares that feature redemption rights that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times,
Class A Ordinary Shares are classified as shareholders’ equity. The Class A Ordinary Shares feature certain redemption rights that
are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, as
of September 30, 2022 and December 31, 2021, 23,000,000 Class A Ordinary Shares subject to possible redemption are presented as temporary
equity, outside of the shareholders’ equity (deficit) section of the accompanying condensed balance sheets.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Company recognizes changes in redemption value
immediately as they occur and adjusts the carrying value of the Class A Ordinary Shares subject to possible redemption to equal the redemption
value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date
for the security. Effective with the closing of the Initial Public Offering, the Company recognized the accretion from initial book value
to redemption amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
Share-Based Compensation
The Company complies with the accounting and disclosure
requirement of FASB ASC Topic 718, “Compensation - Stock Compensation” (“ASC 718”). Share-based compensation to
employees and non-employees is recognized over the requisite service period based on the estimated grant-date fair value of the awards.
Share-based awards with graded-vesting schedules are recognized on a straight-line basis over the requisite service period for each separately
vesting portion of the award. The Company recognizes the expense for share-based compensation awards subject to performance-based milestone
vesting over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates
when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at
each reporting date. Share-based compensation is recognized in general and administrative expense in the accompanying unaudited condensed
statements of operations. The Company issued option awards that contain both a performance condition and service condition. The option
awards vest upon the consummation of the initial Business Combination and will expire in five years after the date on which they first
become exercisable. The Company has determined that the consummation of an initial Business Combination is a performance condition subject
to significant uncertainty. As such, the achievement of the performance is not deemed to be probable of achievement until the consummation
of the event, and therefore no compensation has been recognized for the period from inception to September 30, 2022.
Income Taxes
FASB ASC Topic 740, “Income Taxes,”
prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s
only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax
expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December
31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material
deviation from its position.
There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman federal income tax regulations, income taxes are not levied on the
Company. Consequently, income taxes are not reflected in the accompanying unaudited condensed financial statements. The Company’s
management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Net Income per Ordinary Share
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share” (“ASC 260”). The Company has two classes of shares, which
are referred to as “Class A Ordinary Shares” and “Class B Ordinary Shares.” Income and losses are shared pro rata
between the two classes of shares. Net income per Ordinary Share is calculated by dividing the net income by the weighted average number
of Ordinary Shares outstanding for the respective period. This presentation assumes a Business Combination as the most likely outcome.
The calculation of diluted net income per Ordinary
Share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement Warrants
to purchase 12,066,667 Class A Ordinary Shares because their exercise is contingent upon future events and because inclusion would be
anti-dilutive under the treasury stock method. Accretion associated with the redeemable Class A Ordinary Shares is excluded from earnings
per share as the redemption value approximates fair value.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The table below presents a reconciliation of the
numerator and denominator used to compute basic and diluted net income per share for each class of Ordinary Shares:
| |
For the Three Months Ended | | |
| |
| |
September 30, 2022
(As Restated - See Note 2) | | |
For the Three Months Ended
September 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income | |
$ | 922,764 | | |
$ | 250,751 | | |
$ | 784,291 | | |
$ | 213,122 | |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Weighted average ordinary shares outstanding, basic and diluted | |
| 23,000,000 | | |
| 6,250,000 | | |
| 23,000,000 | | |
| 6,250,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted net income per ordinary share | |
$ | 0.04 | | |
$ | 0.04 | | |
$ | 0.03 | | |
$ | 0.03 | |
| |
For the Nine Months Ended | | |
| |
| |
September 30, 2022
(As Restated - See Note 2) | | |
For the Nine Months Ended
September 30, 2021 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
| |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income - basic | |
$ | 4,956,561 | | |
$ | 1,346,892 | | |
$ | 95,098 | | |
$ | 31,192 | |
Allocation of net income - diluted | |
$ | 4,956,561 | | |
$ | 1,346,892 | | |
$ | 94,551 | | |
$ | 31,739 | |
| |
| | | |
| | | |
| | | |
| | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Weighted average ordinary shares outstanding, basic | |
| 23,000,000 | | |
| 6,250,000 | | |
| 18,619,048 | | |
| 6,107,143 | |
Weighted average ordinary shares outstanding, diluted | |
| 23,000,000 | | |
| 6,250,000 | | |
| 18,619,048 | | |
| 6,250,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic net income per ordinary share | |
$ | 0.22 | | |
$ | 0.22 | | |
$ | 0.01 | | |
$ | 0.01 | |
Diluted net income per ordinary share | |
$ | 0.22 | | |
$ | 0.22 | | |
$ | 0.01 | | |
$ | 0.01 | |
Recent Accounting Pronouncements
The Company’s management does not believe
that any recently issued, but not yet effective, accounting standards updates, if currently adopted, would have a material effect on the
accompanying unaudited condensed financial statements.
Note 4 - Initial Public Offering
On February 22, 2021, the Company consummated
its Initial Public Offering of 23,000,000 Units, including 3,000,000 Over-Allotment Units, at $10.00 per Unit, generating gross proceeds
of $230.0 million, and incurring offering costs of approximately $13.1 million, of which approximately $8.1 million was for deferred underwriting
commissions.
Each Unit consists of one Class A Ordinary Share
and one-third of one redeemable warrant (“Public Warrant”). Each whole Public Warrant will entitle the holder to purchase
one Class A Ordinary Share at an exercise price of $11.50 per share, subject to adjustment (see Note 8).
Note 5 - Private Placement
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the Private Placement of 4,400,000 Private Placement Warrants, at a price of $1.50 per Private
Placement Warrant with the Prior Sponsor, generating gross proceeds of $6.6 million, and incurring offering costs of approximately $7,000.
On June 15, 2022, the Prior Sponsor transferred 4,400,000 Private Placement Warrants to the New Sponsor.
Each whole Private Placement Warrant is exercisable
for one whole Class A Ordinary Share at a price of $11.50 per share. A portion of the proceeds from the sale of the Private Placement
Warrants to the Prior Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does
not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement
Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted
transferees.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Sponsor agreed, subject to limited exceptions,
not to transfer, assign or sell any of its Private Placement Warrants until 30 days after the completion of the initial Business Combination.
Note 6 - Related Party Transactions
Forward Purchase Agreement
In connection with the consummation of the Initial
Public Offering, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with the Prior Sponsor,
which provides for the purchase of $20.0 million Forward Purchase Units, which at the option of the Prior Sponsor, can be increased to
$50.0 million, with each Forward Purchase Unit consisting of one Class A Ordinary Share (the “Forward Purchase Shares”) and
one-third of one warrant to purchase one Class A Ordinary Share at $11.50 per share (the “Forward Purchase Warrants,” together
with the Forward Purchase Units and the Forward Purchase Shares, the “Forward Purchase Securities”), for a purchase price
of $10.00 per Forward Purchase Unit, in a private placement to occur concurrently with the closing of the initial Business Combination.
The purchase under the Forward Purchase Agreement is required to be made regardless of whether any Class A Ordinary Shares are redeemed
by the Public Shareholders. The Forward Purchase Securities will be issued only in connection with the closing of the initial Business
Combination. The proceeds from the sale of Forward Purchase Securities may be used as part of the consideration to the sellers in the
initial Business Combination, expenses in connection with the initial Business Combination or for working capital in the post-transaction
company. The Company classified the Forward Purchase Units as derivative instruments on the accompanying condensed balance sheets. The
initial value of the Forward Purchase Units was insignificant, and the Company recognized a loss in the change in the fair value of the
derivative assets (liabilities) of approximately $196,000 and $147,000 for the three and nine months ended September 30, 2022.
Founder Shares
On September 21, 2020, the Company issued 4,812,500
Class B Ordinary Shares, par value $0.001 per share (the “Founder Shares”) to the Prior Sponsor. On September 23, 2020, the
Prior Sponsor paid an aggregate of $25,000 for certain expenses on behalf of the Company in exchange for issuance of the Founder Shares.
On January 25, 2021, the Company effected a stock dividend of 1,437,500 shares with respect to Class B Ordinary Shares, resulting in an
aggregate of 6,250,000 Founder Shares outstanding. The Prior Sponsor agreed to forfeit up to an aggregate of 750,000 Founder Shares, on
a pro rata basis, to the extent that the option to purchase additional Units was not exercised in full by the underwriters, so that the
Founder Shares would represent 20% of the Company’s issued and outstanding shares after the Initial Public Offering plus the 2,000,000
Forward Purchase Shares underlying the Forward Purchase Units (which at the option of the Prior Sponsor can be increased to up to 5,000,000
Forward Purchase Shares). On February 22, 2021, the underwriter fully exercised its over-allotment option; thus, these 750,000 Founder
Shares were no longer subject to forfeiture.
On June 15, 2022, the Prior Sponsor transferred
all 6,250,000 Founder Shares to the New Sponsor.
The New Sponsor agreed not to transfer, assign
or sell any of its Founder Shares until the earlier to occur of (i) one year after the date of the consummation of the initial Business
Combination, or earlier if, subsequent to the initial Business Combination, (x) the last reported sale price of the Class A Ordinary Shares
equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading
days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the Company consummates
a subsequent liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders having the right
to exchange their Ordinary Shares for cash, securities or other property.
Related Party Loans
On September 23, 2020, the Prior Sponsor agreed
to loan the Company up to $250,000 to cover costs related to the Initial Public Offering pursuant to a promissory note, which was later
amended on January 22, 2021 (the “IPO Note”). The IPO Note was non-interest bearing, unsecured and due upon the closing of
the Initial Public Offering. As of February 22, 2021, the Company borrowed approximately $111,000 under the IPO Note. The Company repaid
the IPO Note in full on February 24, 2021. Subsequent to the repayment, the facility was no longer available to the Company.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
In addition, in order to finance transaction costs
in connection with a Business Combination, the Sponsor, members of the Company’s founding team or any of their affiliates may, but
are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business
Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise,
the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does
not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation
of a Business Combination, without interest, or, at the lenders’ discretion, up to $1.5 million of such Working Capital Loans may
be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical
to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined
and no written agreements exist with respect to such loans. As of September 30, 2022 and December 31, 2021, the Company had no borrowings
under any Working Capital Loans.
On April 13, 2022, the Company issued the
Promissory Note to the Prior Sponsor for an aggregate of up to $200,000. On May 25, 2022, the Prior Sponsor amended the Promissory Note
agreement and increased the principal amount to $400,000. The Promissory Note bears no interest, may be prepaid at any time and is due
and payable within one year from the date of the first drawdown of the amended and restated note, or June 7, 2023. On June 30, 2022,
the Prior Sponsor assigned all of its rights and obligations under the Promissory Note to the New Sponsor in connection with the Sponsor
Transaction. As of September 30, 2022, the Company has drawn $319,000 under the Promissory Note.
Administrative Services Agreement
Commencing on February 17, 2021, through the earlier
of consummation of the initial Business Combination and the liquidation, the Company agreed to pay Kismet LLC, an affiliate of the Prior
Sponsor, $10,000 per month for office space, utilities, secretarial support and administrative services. Fees for such services were waived
for the three and nine months ended September 30, 2022 and 2021.
On June 30, 2022, in connection with the Sponsor
Transaction, the Company and Kismet LLC mutually terminated the Administrative Services Agreement. As a result, the Company is no longer
obligated to pay a $10,000 monthly fee pursuant to the Administrative Services Agreement.
Director Compensation
Commencing on February 18, 2021, through the earlier
of consummation of the initial Business Combination and the Company’s liquidation, the Company agreed to pay its directors $40,000
each and granted each of the independent directors an option to purchase 40,000 Class A Ordinary Shares at an exercise price of $10.00
per share, which will vest upon the consummation of the initial Business Combination and will expire five years after the date on which
it first became exercisable. In addition, the Sponsor, executive officers and directors, or any of their respective affiliates will be
reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential
target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee reviews, on a quarterly
basis, all payments that are made to the Sponsor, officers or directors, or the Company’s or their affiliates.
On May 25, 2022, one of the directors waived his
right to receive a payment of $40,000 and the Company recorded approximately $10,000 and $13,000 of director compensation during the three
and nine months ended September 30, 2022, respectively. During the three and nine months ended September 30, 2021, the Company recorded
approximately $15,000 and $37,000 of director compensation, respectively. As of September 30, 2022 and December 31, 2021, the Company
has payables recognized of approximately $0 and $17,000, respectively, for director compensation, which is classified as accounts payable
- related party in the accompanying condensed balance sheets.
QUADRO
ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Departure and Appointment of Officers
On June 30, 2022, concurrently with the Sponsor
Transaction, Ivan Tavrin, Chief Executive Officer and Chairman of the Company’s board of directors, resigned as Chairman and Chief
Executive Officer of the Company, and as the Company’s principal financial and accounting officer.
Effective June 30, 2022, the Company’s board
of directors appointed Mr. Dimitri Elkin to serve as the Company’s Chief Executive Officer. Mr. Elkin is also serving as the Company’s
principal financial and accounting officer.
Note 7 - Commitments and Contingencies
Registration Rights
The holders of the Founder Shares and Private
Placement Warrants (and any Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans) were entitled to registration rights pursuant to a registration rights agreement dated
February 17, 2021 (the “Registration Rights Agreement”). The holders of these securities are entitled to make up to three
demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of the initial Business Combination. The
Company will bear the expenses incurred in connection with the filing of any such registration statements. On June 30, 2022, in connection
with the Sponsor Transaction, the Prior Sponsor assigned to the New Sponsor all of its rights and obligations under the Registration Rights
Agreement.
Pursuant to the Forward Purchase Agreement, the
Company agreed to use its commercially reasonable efforts (i) to file within 30 days after the closing of the initial Business Combination
a registration statement with the SEC for a secondary offering of the Forward Purchase Shares and the Forward Purchase Warrants (and underlying
Class A Ordinary Shares), (ii) to cause such registration statement to be declared effective promptly thereafter but in no event later
than sixty (60) days after the initial filing, and (iii) to maintain the effectiveness of such registration statement until the earliest
of (A) the date on the Prior Sponsor or its assignees cease to hold the securities covered thereby and (B) the date all of the securities
covered thereby can be sold publicly without restriction or limitation under Rule 144 under the Securities Act. In addition, the Forward
Purchase Agreement provides for “piggy-back” registration rights to the holders of Forward Purchase Securities to include
their securities in other registration statements filed by the Company.
Underwriting Agreement
The Company granted the underwriters a 45-day
option from February 17, 2021, to purchase up to 3,000,000 additional Units at the Initial Public Offering price less the underwriting
discounts and commissions. On February 22, 2021, the underwriters fully exercised their over-allotment option.
The underwriters were entitled to an underwriting
discount of $0.20 per Unit, or $4.6 million in the aggregate, paid upon the closing of the Initial Public Offering. In addition, $0.35
per Unit, or approximately $8.1 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. The
deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes
a Business Combination, subject to the terms of the underwriting agreement.
On August 11, 2022 and September 6, 2022,
two of the underwriters in the Company’s initial public offering irrevocably waived their rights to receive an aggregate of approximately
$5.2 million of deferred underwriting discounts due under the underwriting agreements consummated in connection with the initial public
offering. The Company recognized the portion allocated to Public Shares of approximately $5.0 million as an adjustment to the carrying
value of the Class A ordinary shares subject to possible redemption and the remaining balance of approximately $0.2 million as a gain
from extinguishment of deferred underwriting commissions allocated to derivative warrant liabilities.
Risks and Uncertainties
Management continues to evaluate the impact of
the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect
on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily
determinable as of the date of these unaudited condensed financial statements. The accompanying unaudited condensed financial statements
do not include any adjustments that might result from the outcome of this uncertainty.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
In February 2022, a military conflict started
between Russia and Ukraine. The ongoing military conflict between Russia and Ukraine has provoked strong reactions from the United States,
the United Kingdom, the European Union and various other countries around the world, including the imposition of broad financial and economic
sanctions against Russia. Further, the precise effects of the ongoing military conflict and these sanctions on the global economies remain
uncertain as of the date of the accompanying unaudited condensed financial statements. The specific impact on the Company’s financial
condition, results of operations, and cash flows is also not determinable as of the date of the accompanying unaudited condensed financial
statements.
Note 8 - Warrants
As of September 30, 2022 and December 31, 2021,
7,666,667 Public Warrants and 4,400,000 Private Placement Warrants were outstanding.
Public Warrants may only be exercised for a whole
number of Class A Ordinary Shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants
will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or
(b) 12 months from the closing of the Initial Public Offering; provided in each case that the Company has an effective registration statement
under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the Public Warrants and a current prospectus relating
to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of
the state of residence of the holder (or the Company permits holders to exercise their warrants on a cashless basis under certain circumstances).
The Company agreed that as soon as practicable, but in no event later than 15 business days after the closing of the initial Business
Combination, the Company will use commercially reasonable efforts to file with the SEC and have an effective registration statement covering
the Class A Ordinary Shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A Ordinary
Shares until the warrants expire or are redeemed, as specified in the warrant agreement. If a registration statement covering the Class
A Ordinary Shares issuable upon exercise of the warrants is not effective by the 60th day after the closing of the initial
Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when
the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance
with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A Ordinary Shares are at the
time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of a “covered
security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise
their warrants to do so on a “cashless basis” and, in the event the Company so elects, the Company will not be required to
file or maintain in effect a registration statement, and in the event the Company does not so elect, it will use commercially reasonable
efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The warrants have an exercise price of $11.50
per share, subject to adjustments, and will expire five years after the completion of a Business Combination or earlier upon redemption
or liquidation. In addition, if (x) the Company issues additional Class A Ordinary Shares or equity-linked securities for capital raising
purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20
per Class A Ordinary Share (with such issue price or effective issue price to be determined in good faith by the Company’s board
of directors and, in the case of any such issuance to the Sponsor or an affiliate of the Sponsor, without taking into account any Founder
Shares held by the Sponsor or an affiliate of the Sponsor, as applicable, prior to such issuance) (the “Newly Issued Price”),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available
for the funding of the initial Business Combination on the date of the completion of the initial Business Combination (net of redemptions),
and (z) the volume-weighted average trading price of the Class A Ordinary Shares during the 20 trading day period starting on the trading
day prior to the day on which the Company completes its initial Business Combination (such price, the “Market Value”) is below
$9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market
Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices described under “Redemption of warrants
when the price per Class A Ordinary Share equals or exceeds $18.00” and “Redemption of warrants when the price per Class A
Ordinary Share equals or exceeds $10.00” will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the
Market Value and the Newly Issued Price, respectively.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The Private Placement Warrants are identical to
the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class
A Ordinary Shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or sellable until 30 days
after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will
be non-redeemable so long as they are held by the initial purchaser or such purchaser’s permitted transferees. If the Private Placement
Warrants are held by someone other than the Initial Shareholder or its permitted transferees, the Private Placement Warrants will be redeemable
by the Company and exercisable by such holders on the same basis as the Public Warrants.
Redemption of Warrants When the Price per Class A Ordinary Share
Equals or Exceeds $18.00
Once the warrants become exercisable, the Company
may call the outstanding warrants (excluding the Private Placement Warrants), in whole and not in part, at a price of $0.01 per warrant:
|
● |
upon a minimum of 30 days’ prior written notice of redemption; and |
|
● |
if, and only if, the last reported sale price of the Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30 trading day period ending three business days before the Company sends the notice of redemption to the warrant holders (the “Reference Value”). |
The Company will not redeem the warrants as described
above unless a registration statement under the Securities Act covering the Class A Ordinary Shares issuable upon exercise of the warrants
is then effective and a current prospectus relating to those Class A Ordinary Shares is available throughout the 30-trading day redemption
period.
Redemption of Warrants When the Price per Class A Ordinary Share
Equals or Exceeds $10.00
Once the warrants become exercisable, the Company
may redeem the outstanding warrants, in whole and not in part, at a price of $0.10 per warrant:
|
● |
upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of Class A Ordinary Shares to be determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A Ordinary Shares; and |
|
● |
if, and only if, and only if, the Reference Value equals or exceeds $10.00 per Public Share (as adjusted), and |
|
● |
if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
The “fair market value” of Class A
Ordinary Shares for the above purpose shall mean the volume-weighted average price of the Class A Ordinary Shares for the 10 trading days
immediately following the date on which the notice of redemption is sent to the holders of warrants. In no event will the warrants be
exercisable in connection with this redemption feature for more than 0.361 Class A Ordinary Shares per warrant (subject to adjustment).
In no event will the Company be required to net
cash settle any warrant. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates
the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they
receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly,
the warrants may expire worthless.
QUADRO
ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 9 - Class A Ordinary Shares Subject to
Possible Redemption
The Class A Ordinary Shares feature certain redemption
rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is
authorized to issue 200,000,000 Class A Ordinary Shares with a par value of $0.001 per share. Holders of the Class A Ordinary Shares are
entitled to one vote for each share. As of September 30, 2022 and December 31, 2021, there were 23,000,000 Class A Ordinary Shares outstanding,
which were all subject to possible redemption and are classified outside of permanent equity in the accompanying condensed balance sheets.
The Class A Ordinary Shares subject to possible
redemption reflected on the accompanying condensed balance sheets are reconciled on the following table:
Gross proceeds received from Initial Public Offering | |
$ | 230,000,000 | |
Less: | |
| | |
Fair value of Public Warrants at issuance | |
| (6,823,334 | ) |
Offering costs allocated to Class A ordinary shares | |
| (12,685,596 | ) |
Plus: | |
| | |
Accretion on Class A ordinary shares to redemption value | |
| 19,508,930 | |
Class A ordinary shares subject to possible redemption as of December 31, 2021 | |
| 230,000,000 | |
Plus: | |
| | |
Waiver of Class A ordinary shares issuance costs | |
| 5,077,217 | |
Less: | |
| | |
Accretion on Class A ordinary shares subject to possible
redemption | |
| (3,810,378 | ) |
Class A ordinary shares subject to possible redemption as of September 30, 2022 | |
$ | 231,266,839 | |
Note 10 - Shareholders’ Equity (Deficit)
Class A Ordinary Shares
The Company is authorized to issue 200,000,000
Class A Ordinary Shares with a par value of $0.001 per share. Holders of the Class A Ordinary Shares are entitled to one vote for each
share. As of September 30, 2022 and December 31, 2021, there were 23,000,000 Class A Ordinary Shares issued and outstanding, all of which
were subject to possible redemption and included as temporary equity (see Note 9).
Class B Ordinary Shares
The Company is authorized to issue 10,000,000
Class B Ordinary Shares with a par value of $0.001 per share. As of September 30, 2022 and December 31, 2021, there were 6,250,000 Class
B Ordinary Shares issued and outstanding.
Ordinary shareholders of record are entitled to
one vote for each share held on all matters to be voted on by shareholders. Except as described below, holders of Class A Ordinary Shares
and holders of Class B Ordinary Shares vote together as a single class on all matters submitted to a vote of the shareholders except as
required by law.
The Class B Ordinary Shares will automatically
convert into Class A Ordinary Shares at the time of the initial Business Combination or earlier at the option of the holders thereof at
a ratio such that the number of Class A Ordinary Shares issuable upon conversion of all Founder Shares will equal, in the aggregate, on
an as-converted basis, 20% of the sum of (i) the total number of the Ordinary Shares issued and outstanding upon completion of the Initial
Public Offering, plus (ii) the total number of Class A Ordinary Shares issued or deemed issued or issuable upon conversion or exercise
of any equity-linked securities or rights issued or deemed issued by the Company in connection with or in relation to the completion of
the initial Business Combination (including the Forward Purchase Shares, but not the Forward Purchase Warrants), excluding any Class A
Ordinary Shares or equity-linked securities exercisable for or convertible into Class A Ordinary Shares issued, deemed issued, or to be
issued, to any seller in the initial Business Combination and any Private Placement Warrants issued to the Sponsor or any of its affiliates
or any member of the Company’s management team upon conversion of Working Capital Loans. In no event will the Class B Ordinary Shares
convert into Class A Ordinary Shares at a rate of less than one-to-one.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
Note 11 - Fair Value Measurements
The following tables present information about
the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2022 and December
31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.
| |
Fair Value Measured as of
September 30, 2022 | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | |
Assets | |
| | |
| | |
| |
Investments held in Trust Account - U.S. Treasury Securities | |
$ | 231,366,839 | | |
$ | - | | |
$ | - | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative liabilities - Public Warrants | |
$ | 383,333 | | |
$ | - | | |
$ | - | |
Derivative liabilities - Private Placement Warrants | |
$ | - | | |
$ | 220,000 | | |
$ | - | |
Derivative liabilities - Forward Purchase Agreement | |
$ | - | | |
$ | - | | |
$ | 58,021 | |
| |
Fair Value Measured as of
December 31, 2021 | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | |
Assets | |
| | |
| | |
| |
Investments held in Trust Account - U.S. Treasury Securities | |
$ | 230,038,512 | | |
$ | - | | |
$ | - | |
Derivative assets - Forward Purchase Agreement | |
$ | - | | |
$ | - | | |
$ | 88,970 | |
Liabilities: | |
| | | |
| | | |
| | |
Derivative liabilities - Public Warrants | |
$ | 3,833,334 | | |
$ | - | | |
$ | - | |
Derivative liabilities - Private Placement Warrants | |
$ | - | | |
$ | 2,200,000 | | |
$ | - | |
Transfers to/from Levels 1, 2, and 3 are recognized
in the beginning of the reporting period. The estimated fair value of the Public Warrants was transferred from a Level 3 measurement to
a Level 1 fair value measurement in April 2021, when the Public Warrants were separately listed and traded. The estimated fair value of
the Private Placement Warrants was transferred from a Level 3 measurement to a Level 2 fair value measurement during the year ended December
31, 2021. There were no transfers to/from Levels 1, 2, and 3 during the nine months ended September 30, 2022.
Level 1 assets include investments in mutual funds
that invest solely in U.S. government securities. The Company uses inputs such as actual trade data, quoted market prices from dealers
or brokers, and other similar sources to determine the fair value of its investments.
The fair value of the Public Warrants was initially
measured using a Monte-Carlo simulation and has subsequently been measured based on the market price of such warrants at each measurement
date when separately listed and traded. The fair value of the Private Placement Warrants was initially measured using a Black-Scholes
Option Pricing Model and subsequently using the market value of the Public Warrants. For the three months ended September 30, 2022 and
2021, the Company recognized a decrease in the fair value of derivative warrant liabilities of approximately $362,000 and $1.8 million,
and approximately $5.4 million and $1.7 million for the nine months ended September 30, 2022 and 2021, respectively, presented on the
accompanying condensed statements of operations.
The Company utilizes John C. Hull’s Options,
Futures, and Other Derivatives model to estimate the fair value of the Forward Purchase Units at each measurement date. The Company determined
that the initial fair value of the Forward Purchase Units was insignificant and recognized expense in the change in fair value of the
Forward Purchase Units for the three and nine months ended September 30, 2022 was approximately $196,000 and $147,000, respectively.
QUADRO ACQUISITION ONE CORP.
NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENTS
The change in the fair value of the Level 3 derivative
assets (liabilities) for three and nine months ended September 30, 2022 is summarized as follows:
Derivative assets (liabilities) as of January 1, 2022 | |
$ | 88,970 | |
Change in fair value of derivative assets and liabilities | |
| 30,204 | |
Derivative assets (liabilities) as of March 31, 2022 | |
| 119,174 | |
Change in fair value of derivative assets and liabilities | |
| 18,877 | |
Derivative assets (liabilities) as of June 30, 2022 | |
| 138,051 | |
Change in fair value of derivative assets and liabilities | |
| (196,072 | ) |
Derivative assets (liabilities) as of September 30, 2022 | |
$ | (58,021 | ) |
The change in the fair value of the Level
3 derivative warrant liabilities for three and nine months ended September 30, 2021 is summarized as follows:
Warrant liabilities at January 1, 2021 | |
$ | - | |
Issuance of Public and Private Warrants | |
| 10,827,334 | |
Change in fair value of warrant liabilities | |
| 318,000 | |
Warrant liabilities at March 31, 2021 | |
| 11,145,334 | |
Public Warrants transfer to Level 1 | |
| (7,053,334 | ) |
Change in fair value of warrant liabilities | |
| (88,000 | ) |
Warrant liabilities at June 30, 2021 | |
| 4,004,000 | |
Change in fair value of warrant liabilities | |
| (660,000 | ) |
Warrant liabilities at September 30, 2021 | |
$ | 3,344,000 | |
The estimated fair value of the Forward Purchase
Units is determined using Level 3 inputs. However, inherent uncertainties are involved. If factors or assumptions change, the estimated
fair values could be materially different. Inherent in John C. Hull’s Options, Futures, and Other Derivatives model are assumptions
related to expected, expected life, risk-free interest rate and probability of completing a Business Combination. The risk-free interest
rate is based on the U.S. treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of
the Forward Purchase Units. The expected life of the Forward Purchase Units is assumed to be equivalent to their remaining contractual
term.
The following table provides quantitative information
regarding Level 3 fair value measurements inputs for derivative assets of the Forward Purchase Units at each measurement date:
| |
As of September 30, 2022 | | |
As of December 31, 2021 | |
Stock price | |
$ | 9.93 | | |
$ | 9.75 | |
Warrant price | |
$ | 0.05 | | |
$ | 0.50 | |
Term (in years) | |
| 0.25 | | |
| 1.00 | |
Risk-free interest rate | |
| 3.28 | % | |
| 0.39 | % |
Note 12 - Subsequent Events
Management has evaluated subsequent events
to determine if events or transactions occurring after the balance sheet date through the date the accompanying unaudited condensed
financial statements were issued. Based upon this review, other than as described herein, the Company did not identify any
subsequent event that would have required adjustment or disclosure in the accompanying unaudited condensed financial statements.
On February 20, 2023, the Company held the
2023 Extraordinary General Meeting at which the shareholders of the Company approved an amendment to the amended and restated memorandum
and articles of association to extend the date by which the Company must consummate an initial business combination to April 22, 2023
and to allow the Company’s board, without another shareholder vote, to extend Combination Date on a monthly basis up to seven times
for an additional one month each time until November 22, 2023, or a total of up to nine months after the Original Termination Date. In
connection with the extension, the Sponsor or its designees contributed to the Company as a loan the initial contribution of $120,000
for the portion of the extension ending on April 22, 2023. The sponsor will also loan the company extension contributions of $60,000
per month for each subsequent calendar month (commencing on April 22, 2023 and on the 22nd day of each subsequent month) until November
22, 2023, or portion thereof, that is needed to complete an initial business combination, which amount will be deposited into the trust
account.