References in this report (the "Annual Report") to "we," "us" or the "Company"
refer to Plum Acquisition Corp. I. References to our "management" or our
"management team" refer to our officers and directors, and references to the
"Sponsor" refer to Plum Partners, LLC. The following discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the financial statements and the notes thereto contained
elsewhere in this Annual Report. Certain information contained in the discussion
and analysis set forth below includes forward-looking statements that involve
risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act
that are not historical facts, and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements other than statements of historical fact included in this Form 10-K
including statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" regarding the Company's financial position,
business strategy and the plans and objectives of management for future
operations, are forward-looking statements. Words such as "expect," "believe,"
"anticipate," "intend," "estimate," "seek" and variations and similar words and
expressions are intended to identify such forward-looking statements. Such
forward-looking statements relate to future events or future performance, but
reflect management's current beliefs, based on information currently available.
A number of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the
forward-looking statements. The Company's securities filings can be accessed on
the EDGAR section of the SEC's website at www.sec.gov. Except as expressly
required by applicable securities law, the Company disclaims any intention or
obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company
on January 11, 2021 and formed for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses. We intend to consummate an
initial business combination using cash from the proceeds of our Public Offering
(the "Public Offering") that closed on March 18, 2021 (the "Closing Date") and
the Private Placement, and from additional issuances of, if any, our equity and
our debt, or a combination of cash, equity and debt.
Recent Developments
On March 2, 2023, Plum entered into a Business Combination Agreement (the
"Business Combination Agreement"), by and among Plum, Sakuu Corporation, a
Delaware corporation ("Sakuu"), Plum SPAC 1 Merger Sub, Inc., a Delaware
corporation and wholly owned subsidiary of Plum ("Merger Sub I"), and Plum SPACE
2 Merger Sub, LLC, a Delaware limited liability company and wholly owned
subsidiary of Plum ("Merger Sub II").
The Business Combination Agreement provides that (a) on the day of the closing
of the Business Combination (the "Closing"), Plum will change its jurisdiction
of incorporation by deregistering and transferring by way of continuation as a
Cayman Islands exempted company limited by shares and domesticating as a
corporation incorporated under the laws of the State of Delaware
("Domestication"), change its name to "Sakuu Holdings, Inc.", and amend its
governing documents to become the Post-Closing Certificate of Incorporation and
Post-Closing Bylaws (as such terms are defined in the Business Combination
Agreement), (b) following the Domestication and upon the filing of the
Certificate of First Merger (as defined in the Business Combination Agreement),
Merger Sub I will merge with and into the Company, with the Company surviving
the merger as a wholly owned subsidiary of Plum ("First Merger"), and
(c) immediately following the First Merger and upon the filing of the
Certificate of Second Merger (as defined in the Business Combination Agreement),
the Company will merge with and into Merger Sub II, with Merger Sub II surviving
the merger as a wholly owned subsidiary of Plum ("Second Merger").
The Business Combination is subject to customary closing conditions, including
the satisfaction of the minimum available cash condition, the receipt of certain
governmental approvals and the required approval by the stockholders of Plum and
Sakuu. There is no assurance that the Business Combination will be completed.
Subject to, and in accordance with the terms and conditions of the Business
Combination Agreement, on the day of Closing each Plum Class A ordinary share
and Plum Class B ordinary share issued and outstanding immediately prior to the
Domestication shall, by virtue of the Domestication, be automatically converted
on a one-for-one basis into a share of Class A common stock, par value $0.0001
per share, of Plum ("New Plum Common Shares").
Subject to, and in accordance with the terms and conditions of the Business
Combination Agreement, Sakuu's equity holders will receive a number of shares of
Common Stock (or rights to acquire such Common Stock) of Plum in the aggregate
equal to $600,000,000.00 plus the aggregate exercise prices of Sakuu's options
and warrants, divided by $10.00.
Results of Operations
For the year ended December 31, 2022, we had a net income from operations of
$10,578,125. In addition to the loss from operations of $4,074,437, we
recognized other income of $14,652,562 consisting of the change in fair value of
our warrant liabilities of $8,973,522, termination fee of $1,000,000 and
interest earned on investments held in the Trust Account of $4,679,040.
For the period from January 11, 2021 (inception) through December 31, 2021, we
had a loss from operations of $2,916,919. In addition to the loss from
operations, we recognized other income of $9,510,936 consisting of the change in
fair value of our warrant liabilities of $9,177,618, gain on expiration of our
over-allotment option of $881,755, and interest income of $16,264 partially
offset by transaction costs related to our IPO of $564,701.
Through December 31, 2022, our efforts have been limited to organizational
activities, activities relating to identifying and evaluating prospective
acquisition candidates and activities relating to general corporate matters. We
have not generated any realized income, other than interest income. The change
in fair value of our warrant liabilities had no impact on cash. As of
December 31, 2022, $323,911,642 was held in the Trust Account, cash outside of
Trust Account of $86,401 and $2,640,756 in accounts payable and accrued
expenses.
Except with respect to interest earned on the funds held in the Trust Account
that may be released to us to pay taxes, if any, the proceeds in the Trust will
not be released from the Trust Account (1) to us, until the completion of our
initial Business Combination, or (2) to the Public Shareholders, until the
earliest of (i) the completion of our initial Business Combination, and then
only in connection with those Class A ordinary shares that such shareholders
properly elected to redeem, subject to the limitations, (ii) the redemption of
any public shares properly tendered in connection with a shareholder vote to
amend our amended and restated memorandum and articles of association (A) to
modify the substance or timing of our obligation to provide holders of our
Class A ordinary shares the right to have their shares redeemed in connection
with our initial Business Combination or to redeem 100% of the public shares if
we do not complete an initial Business Combination within 27 months from the
closing of the IPO (or up to 36 months from the closing of our initial public
offering if we extend the period of time to consummate a business combination)
(the "Combination Period") or (B) with respect to any other provision relating
to the rights of holders of the Class A ordinary shares, and (iii) the
redemption of the public shares if we have not consummated a Business
Combination within the Combination Period, subject to applicable law.
41
--------------------------------------------------------------------------------
Table of Contents
Liquidity, Capital Resources and Going Concern
As of December 31, 2022, we had cash outside our Trust Account of $86,401,
available for working capital needs. We intend to use the funds held outside the
Trust Account for identifying and evaluating prospective acquisition candidates,
performing business due diligence on prospective target businesses, traveling to
and from the offices, plants or similar locations of prospective target
businesses, reviewing corporate documents and material agreements of prospective
target businesses, selecting the target business to acquire and structuring,
negotiating and consummating the Business Combination.
In March and April 2021, we sold 31,921,634 units (the "Units" and, with respect
to the shares of Class A ordinary shares included in the Units being offered,
the "Public Shares") at $10.00 per Unit, generating gross proceeds of
$319,216,340. In connection with the vote to approve the Extension Amendment
Proposal, the holders of 26,693,416 Class A ordinary shares properly exercised
their right to redeem their shares for cash at a redemption price of $10.23 per
share, for an aggregate redemption amount of $273,112,311.62.
Additionally, we sold 6,256,218 warrants (the "Private Warrants"), at a price of
$1.50 per Private Warrant, generating gross proceeds of $9,384,327. Following
the sale of our Units and the sale of the Private Warrants, a total of
$319,216,340 ($10.00 per Unit) was placed in the Trust Account. We incurred
$18,336,269 in Initial Public Offering related costs, including $6,384,327 of
underwriting fees, $11,172,572 of deferred underwriting discount and $779,370 of
other costs with $564,701 which was allocated to the Public Warrants and Private
Warrants, included in the statements of operations and $17,771,568 included in
temporary equity.
On January 31, 2022, the Company issued an unsecured promissory note (the
"Dinsdale Note") in the principal amount of $500,000 to Mike Dinsdale. The
Dinsdale Note does not bear interest and is repayable in full upon consummation
of a Business Combination. The Company may draw on the Dinsdale Note from time
to time, in increments of not less than $50,000, until the earlier of March 18,
2023 or the date on which the Company consummates a Business Combination. If the
Company does not complete a Business Combination, the Dinsdale Note shall not be
repaid and all amounts owed under it will be forgiven. Upon the consummation of
a Business Combination, the Mr. Dinsdale shall have the option, but not the
obligation, to convert the principal balance of the Dinsdale Note, in whole or
in part, into private placement warrants (as defined in that certain Warrant
Agreement, dated March 18, 2021, by and between the Company and Continental
Stock Transfer & Trust Company), at a price of $1.50 per private placement
warrant. The Dinsdale Note is subject to customary events of default, the
occurrence of which automatically trigger the unpaid principal balance of the
Dinsdale Note and all other sums payable with regard to the Dinsdale Note
becoming immediately due and payable. The Dinsdale Note was issued pursuant to
the exemption from registration contained in Section 4(a)(2) of the Securities
Act of 1933, as amended.
On July 11, 2022, the Company issued an unsecured promissory note (the "Burns
Note") in the principal amount of $500,000 to Ursula Burns. The Burns Note does
not bear interest and is repayable in full upon consummation of the Company's
initial business combination (a "Business Combination"). Up to fifty percent
(50%) of the principal of the Burns Note may be drawn down from time to time at
the Company's option prior to August 25, 2022 and any or all of the remaining
undrawn principal of the Burns Note may be drawn down from time to time at the
Company's option after August 25, 2022, in each case in increments of not less
than $50,000. If the Company does not complete a Business Combination, the Burns
Note shall not be repaid and all amounts owed under it will be forgiven. Upon
the consummation of a Business Combination, Ms. Burns shall have the option, but
not the obligation, to convert the principal balance of the Burns Note, in whole
or in part, into private placement warrants (as defined in that certain Warrant
Agreement, dated March 18, 2021, by and between the Company and Continental
Stock Transfer & Trust Company), at a price of $1.50 per private placement
warrant. The Burns Note is subject to customary events of default, the
occurrence of which automatically trigger the unpaid principal balance of the
Burns Note and all other sums payable with regard to the Burns Note becoming
immediately due and payable.
On March 16, 2023, the Company issued an unsecured promissory note in the total
principal amount of up to $250,000 (the "Roy Note") to Mr. Kanishka Roy,
individually and as a member of Plum Partners LLC. Mr. Roy funded the initial
principal amount of $250,000 on March 16, 2023. The Roy Note does not bear
interest and matures upon the consummation of the Company's initial business
combination with one or more businesses or entities. In the event the Company
does not consummate a business combination, the Roy Note will be repaid upon the
Company's liquidation only from amounts remaining outside of the Company's trust
account, if any. The Roy Note is subject to customary events of default, the
occurrence of which automatically trigger the unpaid principal balance of the
Roy Note and all other sums payable with regard to the Roy Note becoming
immediately due and payable.
As of December 31, 2022, we had investments held in the Trust Account of
$323,911,642 (including $4,679,040 of income) consisting of money market funds.
As of March 31, 2023, we had investments held in the Trust Account of
$54,368,297 (including $3,088,966 of income) consisting of money market funds.
Income on the balance in the Trust Account may be used to pay taxes. Through
December 31, 2022, we did not withdraw any interest earned on the Trust Account
to pay our taxes.
For the year ended December 31, 2022, cash used in operating activities was
$1,020,823. Net income of $10,578,125 was primarily offset by the change in the
fair value of our warrant liabilities of $8,973,522 and interest earned on
investments held in the Trust Account of $4,679,040. Other operational
activities including amounts due to related party, prepaid assets and accounts
payable and accrued expenses generated $120,000, $348,794, and $1,584,820,
respectively.
For the period from January 11, 2021 (inception) through December 31, 2021, cash
used in operating activities was $2,138,406. Net income of $6,594,017 was
primarily offset by the change in the fair value of our warrant liabilities of
$9,177,618, gain on expiration of our over-allotment option of $881,755, and
payments generating prepaid assets of $392,425. Partially offsetting the net
income was $564,701 from IPO related transaction costs. Other operational
activities include an increase in payables of $1,055,936 and amounts due to
related parties of $115, 000.
We intend to use substantially all of the funds held in the Trust Account, to
acquire a target business and to pay our expenses relating thereto. To the
extent that our equity 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.
Further, our Sponsor, officers and directors or their respective affiliates have
committed to loan us funds as may be required (the "Working Capital Loans"). If
we complete a business combination, we will repay the Working Capital Loans. In
the event that a business combination does not close, we 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. Such Working Capital Loans would be evidenced by promissory notes. The
notes would either be repaid upon consummation of a business combination,
without interest, or, at the lender's discretion, or converted upon consummation
of a business combination into additional Private Warrants at a price of $1.50
per Private Warrant. As of December 31, 2022, $1,000,000 Working Capital Loans
have been issued (Note 5).
In connection with the Company's assessment of going concern considerations in
accordance with FASB ASC205-40, Presentation of Financial Statements-Going
Concern", management has determined that the Company has and will continue to
incur significant costs in pursuit of its acquisition plans which raises
substantial doubt about the Company's ability to continue as a going concern.
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 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 Accounts. 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.
Further, management has determined that if the Company is unable to complete a
Business Combination by June 18, 2023, or March 18, 2024 if elected to extend
the Termination Date up to nine times by an additional one month each time (the
"Combination Period"), then the Company will cease all operations except for the
purpose of liquidating. The date for mandatory liquidation and subsequent
dissolution as well as the Company's working capital deficit raise substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made to the carrying amounts of assets or liabilities should the
Company be required to liquidate after the Combination Period. The Company
intends to complete a Business Combination before the mandatory liquidation
date.
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.
42
--------------------------------------------------------------------------------
Table of Contents
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 entered into any non-financial agreements involving assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities.
Critical Accounting Policies
The accompanying financial statements of the Company are presented in conformity
with accounting principles generally accepted in the United States of America
("GAAP") and pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission ("SEC").
Warrant Liabilities
The Company accounts for the Warrants as either equity-classified or
liability-classified instruments based on an assessment of the specific terms of
the Warrants and applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 480,
Distinguishing Liabilities from Equity ("ASC 480") and ASC 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 meet all of the requirements for equity
classification under ASC 815, including whether the Warrants are indexed to the
Company's own ordinary shares and whether the holders of the Warrants could
potentially require "net cash settlement" in a circumstance outside of the
Company's control, among other conditions for equity classification. This
assessment, which requires the use of professional judgment, is conducted at the
time of issuance of the Warrants 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, such 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, liability-classified 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 such warrants are recognized
as a non-cash gain or loss on the statements of operations. The Company accounts
for the Public and Private warrants in accordance with guidance contained in ASC
815-40. Such guidance provides that because the warrants do not meet the
criteria for equity treatment thereunder, each warrant must be recorded as a
liability (See Note 6).
Convertible Promissory Note
The Company accounts for its convertible promissory note under ASC 815,
"Derivatives and Hedging" ("ASC 815"). Under 815-15-25, the election can be at
the inception of a financial instrument to account for the instrument under the
fair value option under ASC 825, "Financial Instruments" ("ASC 825"). The
Company has made such election for its convertible promissory note. Using fair
value option, the convertible promissory note is required to be recorded at its
initial fair value on the date of issuance and each balance sheet date
thereafter. Differences between the face value of the note and fair value at
issuance are recognized as either an expense in the statements of operations (if
issued at a premium) or as a capital contribution (if issued at a discount).
Changes in the estimated fair value of the notes are recognized as non-cash
gains or losses in the statements of operations.
Redeemable Shares of Class A Ordinary shares
All of the 5,228,218 shares of Class A ordinary shares included in the Units
sold as part of the Public Offering remaining after the redemptions in
connection with the extraordinary general meeting of shareholders held on March
15, 2023 contain a redemption feature as described in the prospectus for the
Public Offering. In accordance with FASB ASC 480, "Distinguishing Liabilities
from Equity", redemption provisions not solely within the control of the Company
require the security to be classified outside of permanent equity. The Company
recognizes changes in redemption value immediately as they occur and will adjust
the carrying value of the security at the end of each reporting period.
Increases or decreases in the carrying amount of redeemable shares will be
affected by charges against additional paid-in capital.
Net Income Per Ordinary Share
The Company has two classes of shares, which are referred to as Class A ordinary
shares and Class B ordinary shares. Earnings and losses are shared pro rata
between the two classes of shares. The potential ordinary shares for outstanding
warrants to purchase the Company's shares were excluded from diluted earnings
per share for the year ended December 31, 2022 and for the period from
January 11, 2021 (inception) through December 31, 2021 because the warrants are
contingently exercisable, and the contingencies have not yet been met. As a
result, diluted net income per common share is the same as basic net income per
common share for the periods.
Recent Accounting Standards
Management does not believe that any recently issued, but not effective,
accounting standards, if currently adopted, would have a material effect on our
financial statements.
© Edgar Online, source Glimpses
PLUM ACQUISITION CORP. I 
