The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with our audited
consolidated financial statements and the notes related thereto which are
included in "Item 8. Consolidated 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," "Item 1A. Risk
Factors" and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company incorporated in the British Virgin Islands as a
business company and incorporated for the purpose of effecting a merger, share
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. We intend to effectuate our initial
business combination using cash from the proceeds of our Initial Public Offering
and the private placement of the private placement units, the proceeds of the
sale of our securities in connection with our initial business combination.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a business
combination will be successful.
Recent Developments
On November 18, 2021, the Company entered into an Agreement and Plan of Merger
(the "Original Merger Agreement") dated November 18, 2021 with Blue Safari Mini
Corp., an exempted company incorporated with limited liability under the laws of
the Cayman Islands and a wholly-owned subsidiary of the Company ("Merger Sub"),
and Bitdeer Technologies Holding Company, an exempted company incorporated with
limited liability under the laws of the Cayman Islands ("Bitdeer").
On December 15, 2021, parties to the Original Merger Agreement entered into an
Amended and Restated Agreement and Plan of Merger (the "Merger Agreement") with
(ii) Bitdeer Technologies Group, an exempted company with limited liability
incorporated under the laws of the Cayman Islands ("BTG"), (iii) Blue Safari
Merge Limited, a British Virgin Islands business company and a wholly-owned
subsidiary of BTG ("Merger Sub 1"), (iv) Blue Safari Merge II Limited, a British
Virgin Islands business company and a wholly-owned subsidiary of BTG ("Merger
Sub 2"), and (v) Bitdeer Merge Limited, an exempted company with limited
liability incorporated under the laws of the Cayman Islands and a wholly-owned
subsidiary of BTG ("Merger Sub 3", and together with BTG, Merger Sub 1 and
Merger Sub 2, the "Acquisition Entities") to effect a change in structure of the
business combination without affecting any underlying economic interests,
whereby (a) Merger Sub 1 will merge with and into the Company with the Company
being the surviving entity (the "First SPAC Merger") and becoming a wholly owned
subsidiary of BTG, (b) immediately following the First SPAC Merger, the Company
will merge with and into Merger Sub 2 with Merger Sub 2 being the surviving
entity (the "Second SPAC Merger", and together with the First SPAC Merger, the
"Initial Mergers"), and (c) following the Initial Mergers, Merger Sub 3 will
merge with and into Bitdeer (the "Acquisition Merger" and together with the
Initial Mergers, the "Mergers"), with Bitdeer being the surviving entity and
becoming a wholly owned subsidiary of BTG. The Merger Agreement and the
transactions contemplated therein were unanimously approved by the boards of
directors of each of the Company, BTG, Merger Sub 1, Merger Sub 2, Merger Sub 3,
Merger Sub and Bitdeer.
The Mergers and other transactions contemplated by the Merger Agreement (the
"Business Combination") are expected to be consummated after obtaining the
requisite shareholders' approval of the Company, BTG, Merger Sub 1, Merger Sub
2, Merger Sub 3, Merger Sub and Bitdeer and the satisfaction of certain other
customary closing conditions. For more information, see the Current Report on
Form 8-K dated December 15, 2021.
On May 30, 2022, parties entered into a First Amendment to the Merger Agreement
(the "Amendment", and the Merger Agreement as amended by such Amendment, the
"Amended Merger Agreement") to extend the termination date upon which either we
or Bitdeer may terminate the Amended Merger Agreement, from May 31, 2022 to
September 1, 2022.
In addition, pursuant to the First Amendment, Bitdeer will provide the Company
interest-free loans with an aggregate principal amount of US$1,993,000 to fund
any amount that may be required in order to extend the period of time available
for us to consummate
11
Table of Contents
a business combination in accordance with our organizational documents (the
"Combination Period") and for our working capital. Such loans will only become
repayable upon the Closing of the Business Combination.
On December 2, 2022, the parties entered into a Second Amendment to Merger
Agreement (the "Second Amendment", and the Amended Merger Agreement as amended
by such Second Amendment, the "Second Amended Merger Agreement") to extend the
termination date upon which either the Company or Bitdeer may terminate the
Second Amended Merger Agreement, from September 1, 2022 to the earlier of (i)
June 1, 2023 and (ii) the then last day of the Combination Period. In addition,
pursuant to the Second Amendment, Bitdeer has agreed to provide the Company an
additional interest-free loans with an aggregate principal amount of $2,584,141
to fund any amount that may be required in order to further extend the
Combination Period and for the Company's working capital. Such loans will only
become repayable upon the Acquisition Closing (as defined in the Second Amended
Merger Agreement). As of December 31, 2022, the Company received such
interest-free loan from Bitdeer in the aggregate principal amount of $2,545,800.
On June 1, 2022 and September 6, 2022, using the loan amount received to date,
the Company deposited into the Company's Trust Account $1,150,000 (representing
$0.20 per Class A ordinary share) to extend the Combination Period from June 14,
2022 to December 14, 2022. On December 5, 2022, the Company made a deposit of
$257,758 (representing $0.15 per Class A ordinary share) to the Trust Account
and extended the Combination Period from December 14, 2022 to March 14, 2023.
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 Initial Public
Offering, and, following our initial public offering, searching for a Business
Combination target and the negotiation of the Merger Agreement as described
above. We do not expect to generate any operating revenues until after the
completion of our initial business combination. We expect to generate
non-operating income in the form of interest income on marketable securities
held after the Initial Public Offering. 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 net loss of $3,917,800, which
consists of operating costs and business combination costs of $4,660,233, offset
by interest income from investments in our Trust Account of $742,433.
For the period from February 23, 2021 (Inception) through December 31, 2021, we
had net loss of $1,239,720, which consists of formation and operating costs of
$1,241,824, offset by interest income from investments in our Trust Account of
$2,104.
Liquidity and Going Concern
On June 14, 2021, Blue Safari Group Acquisition Corp. (the "Company")
consummated the IPO of 5,000,000 units (the "Units"). Each Unit consists of one
ordinary share ("Ordinary Share") and one right ("Right") to receive one-tenth
of one Class A Ordinary Share upon the consummation of an initial business
combination. The Units were sold at an offering price of $10.00 per Unit,
generating gross proceeds of $50,000,000. We granted the underwriters a 45-day
option to purchase up to 750,000 additional Units to cover over-allotments which
the underwriters exercised in full simultaneously with the consummation of the
IPO. The total aggregate issuance by us of 5,750,000 units at a price of $10.00
per Unit resulted in a total gross proceeds of $57,500,000.
As of June 14, 2021, a total of $58,075,000 of the net proceeds from the IPO and
the Private Placement (as defined below) were deposited in a Trust Account
established for the benefit of the Company's public shareholders. Simultaneously
with the closing of the IPO, the Company consummated the private placement
("Private Placement") with BSG First Euro Investment Corp., the Company's
Sponsor, of 292,500 units (the "Private Units") at a price of $10.00 per Private
Unit, generating total proceeds of $2,925,000. The Private Units are identical
to the Units sold in the IPO. Additionally, such initial purchasers agreed not
to transfer, assign or sell any of the Private Units or underlying securities
(except in limited circumstances, as described in the Registration Statement)
until 30 days after the completion of the Company's initial business
combination. Such initial purchasers were granted certain demand and piggyback
registration rights in connection with the purchase of the Private Units. The
Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of
1933, as amended, as the transactions did not involve a public offering.
Following the Initial Public Offering and the sale of the Private Units, a total
of $58,075,000 was placed in the Trust Account, and the Company had $884,500 of
cash held outside of the Trust Account, after payment of costs related to the
Initial Public Offering,
12
Table of Contents
and available for working capital purposes. The Company incurred $4,158,799 in
transaction costs, including $1,150,000 of underwriting fees, $2,012,500 of
deferred underwriting fees, the fair value of the representative shares of
$478,857, and $517,442 of other offering costs.
For the year ended December 31, 2022, there was $1,064,156 of cash used in
operating activities. Net loss of $3,917,800 was affected by interest earned on
cash and marketable securities held in Trust Account amounting to $742,433 and
offset by changes in current assets and liabilities of $3,596,077.
For the period from February 23, 2021 (Inception) to December 31, 2021, there
was $398,627 of cash used in operating activities. Net loss of $1,239,720 was
affected by formation costs paid by Sponsor of $7,169, changes in current assets
and liabilities of $836,028 and offset by interest earned on cash and marketable
securities held in Trust Account amounting to $2,104.
As of December 31, 2022, the Company had $487,303 of cash on hand and working
capital deficit of $6,602,257.
The Company expect to incur increased expenses since becoming a public company
(for legal, financial reporting, accounting and auditing compliance), as well as
expenses in connection with the initial business combination.
On June 1, 2022 and September 6, 2022, using the loan amount received to date,
the Company deposited into the Company's Trust Account $1,150,000 (representing
$0.20 per Class A ordinary share) to extend the Combination Period from June 14,
2022 to December 14, 2022. On December 5, 2022, the Company made a deposit of
$257,758 (representing $0.15 per Class A ordinary share) to the Trust Account
and extended the date by which the Company has to complete a business
combination from December 14, 2022 to March 14, 2023. It is uncertain that the
Company will be able consummate a business combination by this date. If a
business combination is not consummated within the Combination Period, there
will be a mandatory liquidation and subsequent dissolution. 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, "Disclosure of Uncertainties About
an Entity's Ability to Continue as a Going Concern", management has determined
that mandatory liquidation, and subsequent dissolution, should the Company be
unable to complete a business combination, raises substantial doubt about the
Company's ability to continue as a going concern. If a business combination is
not consummated by this date, there will be a mandatory liquidation and
subsequent dissolution. No adjustments have been made to the carrying amounts of
assets and liabilities should the Company be required to liquidate after March
14, 2023.
Based upon the above analysis, management determined that these conditions raise
substantial doubt about the Company's ability to continue as a going concern
within one year after the date the consolidated financial statements are issued.
Off-Balance Sheet Financing 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 June 14, 2021 and will
continue to incur these fees monthly until the earlier of the completion of the
business combination or our liquidation.
The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of
the Initial Public Offering, or $2,012,500. The deferred fee will be payable in
cash to the underwriters solely in the event that we complete a business
combination from the amounts held in the Trust Account, subject to the terms of
the underwriting agreement.
13
Table of Contents
Pursuant to the Second Amendment, Bitdeer will provide certain interest-free
loans with an aggregate principal amount of US$2,584,141 to us to fund any
amount that may be required in order to extend the period of time available for
us to consummate a business combination and for our working capital. Such loans
will only become repayable upon the Closing of the Business Combination. As of
December 31, 2022, we received $2,545,800 under such loan.
On March 1, 2021, the Company issued the Promissory Note to the Sponsor,
pursuant to which the Company may borrow up to an aggregate principal amount of
$200,000. The Promissory Note is non-interest bearing and payable on the date
that the Company consummates the IPO of its securities or the date on which the
Company determines not to conduct an IPO, however, the date was extended to
August 31, 2022, provided that the Company may in its sole discretion, and upon
written notice to the Sponsor, extend such maturity date for an additional six
months in the event that the Company has not repaid in full the principal amount
and accrued interest by August 31, 2022 pursuant to the amended Promissory Note
issued on May 30, 2022. On August 31, 2022, the Company issued an extension
notice to the Sponsor, to extend the maturity date of the Promissory Note for an
additional six (6) months from August 31, 2022 to February 28, 2023. As of
December 31, 2022 and 2021, the Company had borrowed $200,000 under the
promissory note.
Critical Accounting Policies
The preparation of consolidated 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 at the date of the consolidated
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:
Class A Common Stock Ordinary Shares Subject to Possible Redemption
We account for our Class A Common Stock Ordinary Shares Subject to Possible
Redemption in accordance with the guidance in Accounting Standards Codification
("ASC") Topic 480, "Distinguishing Liabilities from Equity." Class A Common
Stock Ordinary Shares Subject to Possible Redemption is classified as a
liability instrument and measured at fair value. Conditionally redeemable Class
A Common Stock Ordinary Shares (including Class A Common Stock Ordinary Shares
that features redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) is classified as temporary equity. At all other times, Class
A Common Stock Ordinary Shares is classified as shareholders' equity. Our Class
A Common Stock Ordinary Shares features certain redemption rights that are
considered to be outside of our control and subject to occurrence of uncertain
future events. Accordingly, all Class A Common Stock Ordinary Shares Subject to
Possible Redemption are presented at redemption value as temporary equity,
outside of the shareholders' equity section of our balance sheet.
Net Income per Common Share
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 "Distinguishing Liabilities from Equity." Ordinary shares
subject to mandatory redemption (if any) is classified as a liability instrument
and is measured at fair value. Conditionally redeemable ordinary shares
(including ordinary shares that features 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) is classified as
temporary equity. At all other times, ordinary shares are classified as
shareholders' equity. The Company's 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.
© Edgar Online, source Glimpses