The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited financial
statements and the notes related thereto which are included in "Item 8.
Financial Statements and Supplementary Data" of this Annual Report. Certain
information contained in the discussion and analysis set forth below includes
forward-looking statements. Our actual results may differ materially from those
anticipated in these forward-looking statements as a result of many factors,
including those set forth under "Special Note Regarding Forward-Looking
Statements," "Item 1A. Risk Factors" and elsewhere in this Annual Report.
Overview
We are Cayman Islands exempted company incorporated on August 6, 2021 for the
purpose of effecting a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar business combination
with one or more target businesses. While we may pursue an initial business
combination target in any business, industry or geographical location, we intend
to focus our search on targets founded by Asian or Asian American entrepreneurs
who are building a global enterprise supported by forward thinking vision and
innovative technology in predictable growth businesses with substantial revenue
potential in frontier technologies including but not limited to artificial
intelligence, blockchain, quantum computing, and electric vehicles. We intend to
effectuate our initial business combination using cash from the proceeds of the
IPO (as defined below) and the private placement of Private Placement Warrants
(as defined below), our capital stock, debt or a combination of cash, stock and
debt.
On February 9, 2022, we consummated our initial public offering (the "IPO") of
20,200,000 of our units (the "Units") which includes the partial exercise of the
underwriters' over-allotment option. Each Unit consisted of one Class A ordinary
share, one redeemable warrant entitling the holder to purchase one-half of one
Class A ordinary share at a purchase price of $11.50 per whole share (the
"Public Warrants"), and one right to acquire one-tenth (1/10) of one Class A
ordinary share. The Units were sold at an offering price of $10.00 per Unit,
generating gross proceeds of $202,000,000.
On March 17, 2022, we announced that the holders of the Units may elect to
separately trade the Class A ordinary shares, Public Warrants and rights
included in the Units, commencing on March 21, 2022. Any Units not separated
continue to trade on the Nasdaq Stock Market LLC ("Nasdaq") under the symbol
"ATAKU." Any underlying Class A Ordinary Shares, Public Warrants and Rights that
are separated trade on the Nasdaq under the symbols "ATAK," "ATAKW" and "ATAKR,"
respectively.
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At December 31, 2022, we had cash of $191,103, prepaids of $284,597, cash and
marketable securities held in the Trust Account of $206,879,903, current
liabilities of $437,158, deferred underwriting commission payable of $7,070,000
and $589,420 of warrant liabilities. Further, we expect to continue to incur
significant costs in the pursuit of our acquisition plans.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from August 6, 2021 (inception) through December 31, 2022
were organizational activities, those necessary to prepare for the IPO,
described below, and after the IPO, identifying a target company for our initial
business combination. We do not expect to generate any operating revenues until
after the completion of our initial business combination. We generate
non-operating income in the form of interest income and gains on marketable
securities held in the Trust Account (as defined below). We incur expenses as a
result of being a public company (for legal, financial reporting, accounting and
auditing compliance), as well as for due diligence expenses.
We classify the warrants issued in connection with our initial public offering
and private placement as liabilities at their fair value and adjust the warrant
instruments to fair value at each reporting period. These liabilities are
subject to re-measurement at each balance sheet date until exercised, and any
change in fair value is recognized in our statement of operations.
For the year ended December 31, 2022, we had net income of $6,604,155, which
consists of formation and operating expenses of $1,705,315, offset by a gain of
$5,191,127 for the change in fair value of the warrant liability, a gain of
$258,440 on the extinguishment of the over-allotment option liability, and a
gain of $2,859,903 for earnings on marketable securities held in the Trust
Account. Formation and operating expenses of $1,705,315 consist $557,565 legal
and accounting expenses, of a $516,746 allocation of offering costs related to
the establishment of the Public Warrant liability, $412,591 insurance expense
amortization, $150,516 administrative fees, $55,542 formation, general and
administrative expenses, and $12,356 advertising and marketing expenses,
For the year ended December 31, 2021, we had net loss of $9,963, which consists
of formation and operating expenses of $9,963.
Liquidity and Capital Resources
On February 9, 2022, we consummated our IPO of 20,200,000 of Units, which
includes the partial exercise of the underwriters' over-allotment option. Each
Unit consists of one Class A ordinary share, one Public Warrant entitling the
holder to purchase one-half of one Class A ordinary share at a purchase price of
$11.50 per whole share, and one right to acquire one-tenth (1/10) of one Class A
ordinary share. The Units were sold at an offering price of $10.00 per Unit,
generating gross proceeds of $202,000,000.
Simultaneously with the consummation of the IPO, we consummated the private
placement ("Private Placement") of 6,470,000 warrants (the "Private Placement
Warrants") at a price of $1.00 per Private Placement Warrant, generating gross
proceeds of $6,470,000. The Private Placement Warrants were sold to our Sponsor.
The Private Placement Warrants are identical to the Public Warrants sold in the
IPO as part of the Units, except that the Private Warrants are non-redeemable
and may be exercised on a cashless basis, in each case so long as they continue
to be held by our Sponsor or its permitted transferees.
Following the closing of the IPO and the private placement of Private Placement
Warrants, an aggregate amount of $204,020,000 has been placed in the trust
account (the "Trust Account") established in connection with the IPO.
Transaction costs amounted to $29,192,787 consisting of $2,525,000 of
underwriting fees, $7,070,000 of deferred underwriting fees, over-allotment
option liability of $258,440, $3,030,000 for issuance of representative shares,
$15,596,420 fair value of rights underlying the Units, and $712,927 of actual
offering costs. In addition, $1,468,333 of cash was held outside of the Trust
Account, which is available for the payment of offering costs and for working
capital purposes. As a result of the underwriters' partial exercise of the
over-allotment option, 50,000 Class B ordinary shares are no longer subject to
forfeiture.
As of December 31, 2022, we had marketable securities held in the Trust Account
of 206,879,903 consisting of money market funds which invest U.S. Treasury
securities. Earnings on the balance in the Trust Account may be used by us to
pay taxes. Through December 31, 2022, we have not withdrawn any interest earned
on the Trust Account.
For the year ended December 31, 2022, net cash used in operating activities was
$1,095,955. Net income of $6,604,155 was increased by offering costs allocation
of $516,746 and an increase in accounts payable and accrued expenses of
$377,211, and reduced by a change in the fair value of our warrant liability of
$5,191,127, earnings on marketable securities held in Trust Account of
$2,859,903, gain on extinguishment of the over-allotment liability of $258,440,
an increase in prepaid assets of $284,597.
For the period from August 6, 2021 (inception) through December 31, 2021, net
cash used in operating activities was $1. Net loss of $9,963 was increased by a
$17 payment of advertising and marketing costs made by the Sponsor on behalf of
the Company and an increase in accounts payable and accrued expenses of $9,947.
For the year ended December 31, 2022 and for the period from August 6, 2021
(inception) through December 31, 2021, net cash used in investing activities was
$204,020,000 and $0 for our investment in the Trust Account, respectively.
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For the year ended December 31, 2022, net provided by financing activities was
$205,641,685 primarily from the sale of the Units and Private Placement Warrants
in the amount of $208,470,000. This was offset by the $242,801 repayment of a
related party promissory note, and payment of offering costs of $2,985,514.
For the period from August 6, 2021 (inception) through December 31, 2021, net
cash provided by financing activities was $65,372 primarily from $150,000
proceeds from the promissory note offset by payment of offering costs of
$84,628.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
income taxes payable), to complete our initial business combination. To the
extent that our capital stock or debt is used, in whole or in part, as
consideration to complete our initial business combination, the remaining
proceeds held in the Trust Account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and
pursue our growth strategies.
As of December 31, 2022, we had cash of $191,103 outside the Trust Account. We
intend to use the funds held outside the Trust Account primarily to identify and
evaluate target businesses, perform business due diligence on prospective target
businesses, travel to and from the offices, plants or similar locations of
prospective target businesses or their representatives or owners, review
corporate documents and material agreements of prospective target businesses,
and structure, negotiate and complete our initial business combination.
In order to fund working capital deficiencies or finance transaction costs in
connection with initial business combination, our Sponsor, or certain of our
officers and directors or their affiliates may, but are not obligated to, loan
us funds as may be required. If we complete initial business combination, we
would repay such loaned amounts. In the event that the initial business
combination does not close, we may use a portion of the working capital held
outside the Trust Account to repay such loaned amounts but no proceeds from our
Trust Account would be used for such repayment. Up to $1,500,000 of such loans
may be convertible into private placement warrant at a price of $1.00 per
private placement warrant, at the option of the lender. The private placement
warrants would be identical to the Private Placement Warrants.
We do not believe we will need to raise additional funds in order to meet the
expenditures required for operating our business. However, if our estimate of
the costs of identifying a target business, undertaking in-depth due diligence
and negotiating the initial business combination are less than the actual amount
necessary to do so, we may have insufficient funds available to operate our
business prior to our initial business combination. Moreover, we may need to
obtain additional financing either to complete our initial business combination
or because we become obligated to redeem a significant number of our Public
Shares upon consummation of our initial business combination, in which case we
may issue additional securities or incur debt in connection with such initial
business combination. Subject to compliance with applicable securities laws, we
would only complete such financing simultaneously with the completion of our
initial business combination. If we are unable to complete our initial business
combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the Trust Account. In addition,
following our initial business combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.
Off-balance sheet Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of December 31, 2022. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements,
established any special purpose entities, guaranteed any debt or commitments of
other entities, or purchased any non-financial assets.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay our Sponsor
a monthly fee of $10,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on February 9, 2022 and
will continue to incur these fees monthly until the earlier of the completion of
the initial business combination and our liquidation.
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The underwriter of the IPO is entitled to a deferred discount of $0.35 per Unit,
or $7,070,000 in the aggregate. The deferred discount will become payable to the
underwriter from the amounts held in the Trust Account solely in the event that
we complete a Business Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Policies
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and income and expenses
during the periods reported. Actual results could materially differ from those
estimates. We have identified the following critical accounting policies:
Warrant Liabilities
We account for the warrants underlying the Units and the private placement
warrants in accordance with the guidance contained in ASC 815 under which the
public warrants and the private placement warrants do not meet the criteria for
equity treatment and must be recorded as liabilities. Under ASC 815-40, the
public warrants and the private placement warrants are not indexed to our
ordinary shares in the manner contemplated by ASC 815-40 because the holder of
the instrument is not an input into the pricing of a fixed-for-fixed option on
equity shares. Accordingly, we classify the public warrants and the private
placement warrants as liabilities at their fair value and adjust the public
warrants and the private placement warrants to fair value at each reporting
period. These liabilities are subject to re-measurement at each balance sheet
date until exercised, and any change in fair value is recognized in our
statement of operations. Subsequent to our initial public offering, the public
warrant value is based on the public trading value. The Company utilized the
Black Scholes Merton simulation model to value the private placement warrants as
of December 31, 2022.
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 Accounting Standards Codification
("ASC") Topic 480. Class A ordinary shares subject to mandatory redemption is
classified as a liability instrument and is measured at fair value.
Conditionally redeemable ordinary shares (including ordinary shares that
features redemption rights that is either within the control of the holder or
subject to redemption upon the occurrence of uncertain events not solely within
the Company's control) is classified as temporary equity. At all other times,
Class A ordinary shares are classified as shareholders' equity. Our Class A
ordinary shares feature certain redemption rights that are considered to be
outside of the Company's control and subject to occurrence of uncertain future
events. Accordingly, at December 31, 2022, Class A ordinary shares subject to
possible redemption is presented at redemption value as temporary equity,
outside of the shareholders' equity section of the Company's balance sheet.
Net Income (Loss) per Ordinary Share
Net loss per share is computed by dividing net loss by the weighted average
number of ordinary shares outstanding during the period. Ordinary shares subject
to possible redemption at December 31, 2022, which are not currently redeemable
and are not redeemable at fair value, have been excluded from the calculation of
basic net loss per ordinary share since such shares, if redeemed, only
participate in their pro rata share of the trust account earnings. The Company
has not considered the effect of the warrants sold in the initial public
offering and the private placement to purchase an aggregate of 6,470,000 private
placement warrants in the calculation of diluted loss per share, since the
exercise of the warrants is contingent upon the occurrence of future events and
the inclusion of such warrants would be anti-dilutive. As a result, diluted net
loss per ordinary share is the same as basic net loss per ordinary share for the
periods presented.
The Company's statement of operations includes a presentation of net income
(loss) per ordinary share subject to possible redemption and allocates the net
income (loss) into the two classes of shares in calculating net earnings (loss)
per ordinary share, basic and diluted. For redeemable Class A ordinary shares,
net earnings (loss) per ordinary share is calculated by dividing the net loss by
the weighted average number of Class A ordinary shares subject
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to possible redemption outstanding since original issuance. For non-redeemable
Class A ordinary shares, net income per share is calculated by dividing the net
income by the weighted average number of non-redeemable Class A ordinary shares
outstanding for the period. Nonredeemable Class A ordinary shares include the
representative shares issued to Maxim at the closing of the initial public
offering. For non-redeemable Class B ordinary shares, net earnings (loss) per
share is calculated by dividing the net loss by the weighted average number of
nonredeemable Class B ordinary shares outstanding for the period. Non-redeemable
Class B ordinary shares include the founder shares as these shares do not have
any redemption features and do not participate in the income earned on the trust
account.
Recent Accounting Standards
In August 2020, the Financial Accounting Standards Board issued ASU No. 2020-06,
"Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity" ("ASU
2020-06"), which simplifies accounting for convertible instruments by removing
major separation models required under current GAAP. ASU 2020-06 removes certain
settlement conditions that are required for equity contracts to qualify for the
derivative scope exception, and it also simplifies the diluted earnings per
share calculation in certain areas. ASU 2020-06 is effective for smaller
reporting companies for fiscal years beginning after December 15, 2023 including
interim periods within those fiscal years. We are currently assessing the
impact, if any, that ASU 2020-06 would have on our financial position, results
of operations or cash flows.
Our management does not believe that there are any other recently issued, but
not yet effective, accounting standards, if currently adopted, would have a
material effect on our balance sheet.
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