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 on Form 10-K.
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," and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company incorporated on July 20, 2020 as a Delaware
corporation and formed for the purpose of entering into a merger, share
exchange, asset acquisition, stock purchase, recapitalization, reorganization or
similar Business Combination with one or more businesses or IPO and the sale of
the Private Placement Warrants, our capital stock, debt or a combination of
cash, stock and debt.
The outbreak of the COVID-19 coronavirus has resulted in a widespread health
crisis that has adversely affected the economies and financial markets
worldwide, and potential target companies may defer or end discussions for a
potential business combination with us whether or not COVID-19 affects their
business operations. The extent to which COVID-19 impacts our search for a
business combination will depend on future developments, which are highly
uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat
its impact, among others. We may be unable to complete a business combination if
continued concerns relating to COVID-19 restrict travel, limiting our ability to
conduct meetings to negotiate and consummate transactions in a timely manner
with potential investors, target company's personnel, or vendors and services
providers.
Results of Operations
We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities from inception through December 31, 2022 were
organizational activities and those necessary to prepare for the IPO, described
below, and since the IPO, the search for a prospective initial Business
Combination. We do not expect to generate any operating revenues until after the
completion of our initial Business Combination, at the earliest. We generate
non-operating income in the form of interest income from the proceeds of the IPO
placed in the Trust Account. We expect that we will incur increased expenses as
a result of being a public company (for legal, financial reporting, accounting
and auditing compliance), as well as for due diligence expenses in connection
with searching for, and completing, a Business Combination.
For the year ended December 31, 2022, we had a net income of $20,615, which
primarily consists of net income from interest earned on marketable securities
held in the Trust Account of $1,801,693, partially offset by operating expenses
of $1,244,295, Delaware franchise taxes of $200,050, and provision for income
taxes $336,733.
For the year ended December 31, 2021, we had a net loss of $347,103, which
primarily consists of operating expenses of $324,544, provision for income tax
of $5,506 and accrual of Delaware franchise taxes of $34,902, partially offset
by interest earned on marketable securities held in the Trust Account of $6,837.
Liquidity and Capital Resources
On October 29, 2021, we consummated the IPO of 11,000,000 units and on
November 5, 2021 the underwriters fully exercised their over-allotment option
for an additional 1,650,000 units, in each case, at $10.00 per unit, generating
gross proceeds of $126,500,000. Simultaneously with the closing of the IPO, we
consummated the
27
--------------------------------------------------------------------------------
Table of Contents
sale of 2,210,667 private placement warrants to the sponsor at a price of $1.50
per warrant, generating gross proceeds of $3,316,000. In connection with the
exercise of the Over-Allotment, our sponsor purchased an additional 110,000
private placement warrants at $1.50 per warrant for additional proceeds of
$165,000.
Following the closing of the IPO and the Over-Allotment, $127,765,000 ($10.10
per Unit) from the net proceeds of the sale of the Units in the IPO and the
Private Placement Warrants was placed in a trust account and invested in U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), with
a maturity of 180 days or less or in any open-ended investment company that
holds itself out as a money market fund selected by the Company meeting the
conditions of paragraphs (d)(2), (d) (3) and (d)(4) of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of:
(i) the completion of a Business Combination and (ii) the distribution of the
Trust Account. We incurred offering expenses in the aggregate amount of
$2,654,349, consisting of 1,466,667 Private Placement Warrants valued at $1.50
per Private Placement Warrant or $2,200,000 of underwriting fees and $454,349 of
other costs. Offering costs for the Over-Allotment amounted to $330,000
consisting of 220,000 Private Placement Warrants valued at $1.50 per Private
Placement Warrant or $330,000 of underwriting fees.
On December 20, 2022, the Company held a Special Meeting in lieu of an Annual
Meeting of Stockholders (the
"Special Meeting"). At the Special Meeting stockholders voted on and approved an
amendment (the "Extension
Amendment") to the Company's amended and restated certificate of incorporation
to extend the deadline by which the Company must complete an initial business
combination from April 29, 2023 to October 30, 2023. In connection with the
approval of the Extension Amendment, the Company was required to give holders of
its Class A Common Stock the right to redeem their shares. Holders of an
aggregate 10,170,490 shares of Class A Common Stock exercised their redemption
rights and did not subsequently reverse that decision.
For the year ended December 31, 2022, net cash used in operating activities was
$709,228. Net cash provided by investing activities was $104,039,426 and net
cash used in financing activities was $103,185,588 mainly reflecting the
redemption of common stock.
For the year ended December 31, 2021, cash used in operating activities was
$975,653. Net cash used in investing activities was $127,765,000 and net cash
provided by financing activities was $129,386,651 mainly reflecting the proceeds
of our IPO and subsequent deposit into the trust account.
At December 31, 2022, we had cash held in the trust account of $25,534,097. 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 business combination. To the extent that
our capital stock or debt is used, in whole or in part, as consideration to
complete our Business Combination, the remaining proceeds held in the Trust
Account will be used as working capital to finance the operations of the target
business or businesses, make other acquisitions and pursue our growth
strategies.
At December 31, 2022, we had cash of $815,608 outside of 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 a business combination.
As of December 31, 2022, the Company had $815,608 in its operating bank account,
$25,534,097 in cash held in the Trust Account to be used for a Business
Combination or to repurchase or redeem its Class A Common Stock in connection
therewith and working capital of $488,936, net of franchise taxes payable and
income taxes payable. Management expects to incur significant costs in pursuit
of its acquisition plans. The Company believes it will need to raise additional
funds in order to meet the expenditures required for operating its business and
to consummate a business combination. If the Company is unable to complete the
Business Combination because it does not have sufficient funds available, the
Company will be forced to cease operations and liquidate the Trust
28
--------------------------------------------------------------------------------
Table of Contents
Account. In addition, following the Business combination, if cash on hand is
insufficient, the Company may need to obtain additional financing in order to
meet its obligations.
In connection with the Company's assessment of going concern considerations in
accordance with the authoritative guidance in Financial Accounting Standards
Board ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of
Uncertainties about an Entity's Ability to Continue as a Going Concern,"
management has determined that that if the Company is unable to raise additional
funds to alleviate liquidity needs, obtain approval for an extension of the
deadline or complete a Business Combination by October 30, 2023, then the
Company will cease all operations except for the purpose of liquidating. It is
uncertain that the Company will be able to consummate a Business Combination by
the specified period. If a Business Combination is not consummated by
October 30, 2023, there will be a mandatory liquidation and subsequent
dissolution. The liquidity condition and date for mandatory liquidation and
subsequent dissolution raise substantial doubt about the Company's ability to
continue as a going concern one year from the date that these financial
statements are issued. These financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable 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 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.
The underwriters were paid an underwriting fee consisting of 1,686,667 warrants
(as the over- allotment option was exercised in full) valued at $1.50 per
warrant or $2,530,000 under the same terms as the Private Placement Warrants.
JOBS Act
On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We will qualify as an "emerging growth company" and
under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for non-emerging growth companies. As such, our financial statements may not be
comparable to companies that comply with public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal control over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be
required of non-emerging growth public companies under the Dodd-Frank Wall
Street Reform and Consumer Protection Act, (iii) comply with any requirement
that may be adopted by the PCAOB regarding mandatory audit firm rotation or a
supplement to the auditor's report providing additional information about the
audit and the financial statements (auditor discussion and analysis) and
(iv) disclose certain executive compensation related items such as the
correlation between executive
29
--------------------------------------------------------------------------------
Table of Contents
compensation and performance and comparisons of executive compensation to median
employee compensation. These exemptions will apply for a period of five years
following the completion of our IPO or until we are no longer an "emerging
growth company," whichever is earlier.
Critical Accounting Estimates
The preparation of 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. The Company has not identified any critical accounting estimates.
© Edgar Online, source Glimpses
OPY ACQUISITION CORP. I 