ALSP ORCHID ACQUISITION CORPORATION I References to the "Company," "ALSP Orchid Acquisition Corporation I" "our," "us"
or "we" refer to
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Quarterly Report on Form 10-Q, words such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions, as they relate to us or our management, identify forward looking statements. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our otherSEC filings. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. No assurance can be given that results in any forward-looking statement will be achieved and actual results could be affected by one or more factors, which could cause them to differ materially. The cautionary statements made in this Quarterly Report on Form 10-Q should be read as being applicable to all forward-looking statements whenever they appear in this Quarterly Report. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with theSEC . All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to those factors described herein including Item 1A "Risk Factors," and in the Risk Factors section of our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 and our Quarterly Report on Form 10-Q for the period endedMarch 31, 2022 filed with theUS Securities and Exchange Commission onMarch 31, 2022 andMay 16, 2022 , respectively.
Overview
The registration statement for the Company's initial public offering was declared effective by theUnited States Securities and Exchange Commission onNovember 18, 2021 . OnNovember 23, 2021 , the Company consummated its initial public offering of 17,250,000 units at$10.00 per unit, generating gross proceeds of approximately$172.5 million ("Initial Public Offering"), and incurring offering costs of approximately$10.0 million , inclusive of approximately$6.0 million in deferred underwriting commissions. Each unit consists of one Class A ordinary share and one-half warrant to purchase one Class A ordinary share at an exercise price of$11.50 .
Simultaneously with the closing of our Initial Public Offering, the Company
consummated the private placement of 915,000 private placement units at a price
of
Upon the closing of our Initial Public Offering and Private Placement,
approximately
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The funds in the Trust Account will be invested only inU.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 which invest only in directU.S. government treasury obligations (collectively "Permitted Investments"), until the earlier of: (i) the completion of an initial business combination or (ii) the distribution of the assets held in the Trust Account. Our management has broad discretion with respect to the specific application of the net proceeds of our Initial Public Offering and the Private Placement, although substantially all of the net proceeds are intended to be applied toward consummating an initial business combination. If the Company is unable to complete an initial business combination within 15 months from the closing of the Initial Public Offering (the "Initial Period," which may be extended in up to two separate instances by an additional three months each, for a total of up to 18 months or 21 months, as applicable (each period as so extended, an "Extension Period"), by depositing into the Trust Account for each three month extension in an amount of$0.10 per unit; provided that the Initial Period will automatically be extended to 18 months, and any Extended Period will automatically be extended to 21 or 24 months, as applicable (any such automatically extended period, the "Automatically Extended Period"), if the Company has filed (a) a Form 8-K including a definitive merger or acquisition agreement or (b) a proxy statement, registration statement or similar filing for an initial business combination but have not completed the initial business combination during the applicable period (any such Extended Period or Automatically Extended Period, an "Extension Period"), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay our income taxes (less up to$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of our Company, subject in each case to our obligations underCayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to consummate an initial business combination within 15 months (or during any Extension Period) from the close of our Initial Public Offering.
Liquidity and Capital Resources
As of
Our liquidity needs up to
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In connection with the Company's assessment of going concern considerations in accordance with Accounting Standards Codification 205-40, Presentation of Financial Statements - Going Concern , we have evaluated the Company's liquidity and financial condition and determined that it is probable the Company will not be able to meet its obligations over the period of one year from the issuance date of the financial statements. In addition, while the Company plans to seek additional funding or to consummate a Business Combination, there is no guarantee the Company will be able to borrow such funds from its Sponsor, an affiliate of the Sponsor, or certain of the Company's officers and directors in order to meet its obligations through the earlier of the consummation of a Business Combination or one year from this filing. We have determined that the uncertainty surrounding the Company's liquidity condition raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable as of the date of the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Results of Operations
All activity since inception up to
For the three and six months ended
Critical Accounting Policies
This management's discussion and analysis of our financial condition and results of operations is based on our condensed financial statements, which have been prepared in accordance with GAAP. The preparation of our unaudited condensed financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our unaudited condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies:
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Investments Held in the Trust Account
Our portfolio of investments held in the trust account is comprised of
Class A Ordinary Shares Subject to Possible Redemption
All of the Class A ordinary shares sold as part of the Units in our Initial
Public Offering contain a redemption feature which allows for the redemption of
such shares in connection with the Company's liquidation, if there is a
shareholder vote or tender offer in connection with our initial business
combination and in connection with certain amendments to the Company's amended
and restated memorandum and articles of association. In accordance with FASB ASC
Topic 480 ("ASC 480"), 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. Ordinary liquidation events, which involve the
redemption and liquidation of all of the entity's equity instruments, are
excluded from the provisions of ASC 480. Accordingly, as of
Net Income (Loss) Per Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260 ("ASC 260"), "Earnings Per Share." Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold in our Initial Public Offering and Private Placement to purchase an aggregate of 9,082,500 shares of Class A ordinary shares in the calculation of diluted earnings per share, since their inclusion would be anti-dilutive under the treasury stock method.
Net income (loss) per ordinary share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, "Earnings Per Share." Net loss per ordinary share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. The Company has not considered the effect of the warrants sold in the Initial Public Offering and Private Placement to purchase an aggregate of 9,082,500 shares of Class A ordinary shares in the calculation of diluted earnings per ordinary share, since the exercise of warrants is contingent upon the occurrence of future events and their inclusion would be anti-dilutive under the treasury stock method.
The Company's unaudited condensed statement of operations includes a presentation of income per share for ordinary shares subject to redemption in a manner similar to the two-class method of income per share. In order to determine net loss attributable to both the Class A and Class B ordinary shares the Company first considered the total loss allocable to both set of shares, split pro rata between the Class A and Class B ordinary shares. Net loss per share, basic and diluted, for Class A ordinary shares is calculated by dividing the net loss allocated to the Class A ordinary shares during the reporting period by the weighted average number of Class A ordinary shares outstanding for the period. Net loss per share, basic and diluted, for Class B non-redeemable ordinary shares is calculated by dividing the net loss allocated to the Class B non-redeemable ordinary shares by the weighted average number of Class B non-redeemable ordinary shares outstanding for the period. AtJune 30, 2022 , the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then participate in the earnings. As a result, diluted income per common share is the same as basic net income per common share for the three and six months endedJune 30, 2022 . 21
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Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480 and FASB ASC Topic 815,
Derivatives and Hedging
("ASC 815"). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for
equity classification under ASC 815, including whether the warrants are indexed
to the Company's own ordinary shares, among other conditions for equity
classification. This assessment, which requires the use of professional
judgment, is conducted at the time of warrant issuance and as of each subsequent
quarterly period end date while the warrants are outstanding. For issued or
modified warrants that meet all of the criteria for equity classification, the
warrants are required to be recorded as a component of additional
paid-in
capital at the time of issuance. For issued or modified warrants that do not
meet all the criteria for equity classification, the warrants are required to be
recorded at their initial fair value on the date of issuance, and each balance
sheet date thereafter. Changes in the estimated fair value of the warrants are
recognized as a
non-cash
gain or loss on the statements of operations. The warrants issued in our Initial
Public Offering and Private Placement are equity classified.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact on the accompanying unaudited condensed financial statements.
Off-Balance
Sheet Arrangements
As ofJune 30, 2022 , the Company did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Contractual Obligations
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Shares and warrants that may be issued upon conversion of working capital loans, if any, are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of our Initial Public Offering. The holders of these securities are entitled to demand that the Company register such securities. In addition, the holders have certain registration rights which provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the founder shares, as described in Note 4, and (ii) in the case of the Private Placement units and the respective Class A ordinary shares underlying the Private Placement warrants, 30 days after the completion of an initial business combination.
The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a 45-day option from the date of the final prospectus relating to our Initial Public Offering to purchase up to 2,250,000 additional units to cover over-allotments, if any, at$10.00 per unit, less underwriting discounts and commissions. The underwriters exercised this option in full onNovember 23, 2021 .
The underwriters were paid a cash underwriting discount of two percent (2%) of
the gross proceeds of our Initial Public Offering, or
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JOBS Act
OnApril 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. The Company 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. The Company is electing to delay the adoption of new or revised accounting standards, and as a result, the Company 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 unaudited condensed financial statements may not be comparable to companies that comply with public company effective dates.
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