SEC Info - 7 Acquisition Corp. - ‘10-Q’ for 6/30/22

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		Alternative Formats (Word, et al.) Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (audited) Condensed Financial Statements Condensed Statements of Cash Flows for the six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited) Condensed Statements of Changes in Shareholders' Equity (Deficit) for the three and six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited) Controls and Procedures Defaults Upon Senior Securities Exhibits Item 1 Item 1A Item 2 Item 3 Item 4 Item 5 Item 6 Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Mine Safety Disclosures Notes to Unaudited Condensed Financial Statements Other Information Part Ii -- Other Information Quantitative and Qualitative Disclosures About Market Risk Risk Factors Signatures Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds
1	1st Page – Filing Submission
"	Table of Contents
"	Item 1
"	Condensed Financial Statements
"	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (audited)
"	Condensed Statements of Changes in Shareholders' Equity (Deficit) for the three and six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited)
"	Condensed Statements of Cash Flows for the six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited)
"	Notes to Unaudited Condensed Financial Statements
"	Item 2
"	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Item 3
"	Quantitative and Qualitative Disclosures About Market Risk
"	Item 4
"	Controls and Procedures
"	Part Ii -- Other Information
"	Legal Proceedings
"	Item 1A
"	Risk Factors
"	Unregistered Sales of Equity Securities and Use of Proceeds
"	Defaults Upon Senior Securities
"	Mine Safety Disclosures
"	Item 5
"	Item 6
"	Exhibits
"	Signatures

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM i 10-Q

(Mark One)

i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended i June 30, 2022

i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number:

i 7 Acquisition Corporation

(Exact name of registrant as specified in its charter)


i Cayman Islands	i 001-41020	i 98-1587317
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

i 750 East Main Street, i Suite 600

i Stamford, i Connecticut i 06902

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: i (203) i 869-4400

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
i Units, each consisting of one Class A ordinary share, $0.0001 par value per share, and one-half of one redeemable warrant	i SVNAU	The i Nasdaq Stock Market LLC
i Class A ordinary shares included as part of the Units	i SVNA	The i Nasdaq Stock Market LLC
i Warrants, included as part of the Units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	i SVNAW	The i Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 18 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. i Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 18 months (or for such shorter period that the registrant was required to submit such files). i Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐ Large accelerated filer	☐ Accelerated filer
☒ i Non-accelerated filer	i ⌧ Smaller reporting company
	i ⌧ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. i ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes i ⌧ No ☐

As of August 12, 2022, there were i 23,000,000 Class A ordinary shares, $0.0001 par value per share, and i 5,750,000 Class B ordinary shares, $0.0001 par value per share, issued and outstanding.

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7 ACQUISITION CORPORATION

Quarterly Report on Form 10-Q

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		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements	1

	Condensed Balance Sheets as of June 30, 2022 (unaudited) and December 31, 2021 (audited)	1

	Condensed Statements of Operations for the three and six months ended June 30, 2022, the three months ended June 30, 2021 and for the period from March 4, 2021 (inception) through June 30, 2021 (unaudited)	2

	Condensed Statements of Changes in Shareholders’ Equity (Deficit) for the three and six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited)	3

	Condensed Statements of Cash Flows for the six months ended June 30, 2022 and for the period from March 4, 2021 (inception) through June 30, 2021(unaudited)	4

	Notes to Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	27

SIGNATURES		28

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Item 1. Condensed Financial Statements

7 ACQUISITION CORPORATION

CONDENSED BALANCE SHEETS


	June 30, 2022		December 31, 2021
	(unaudited)		(audited)
ASSETS
Current assets
Cash	$	i 427,626	$	i 660,773
Prepaid expenses – current		i 393,750		i 376,884
Total Current Assets		i 821,376		i 1,037,657
Non-current assets
Cash and marketable securities held in Trust Account		i 234,955,228		i 234,602,881
Prepaid expenses – non-current		i 125,247		i 307,247
Total Non-current Assets		i 235,080,475		i 234,910,128
Total Assets	$	i 235,901,851	$	i 235,947,785

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	i 337,529	$	i 90,911
Promissory note – related party		—		i 16,790
Total Current Liabilities		i 337,529		i 107,701
Non-Current liabilities
Warrant Liability		i 3,697,000		i 13,878,000
Deferred underwriter fee payable		i 8,050,000		i 8,050,000
Total Non-current Liabilities		i 11,747,000		i 21,928,000
Total Liabilities		i 12,084,529		i 22,035,701

Commitments and Contingencies (Note 8)
Class A ordinary shares subject to possible redemption; $ i i 0.0001 / par value; i i 500,000,000 / shares authorized; i i 23,000,000 / shares issued and outstanding at redemption value of $ i i 10.20 / per share		i 234,955,228		i 234,602,881

Shareholders’ Equity (Deficit)
Preference shares, $ i i 0.0001 / par value; i i 5,000,000 / shares authorized; i i none / issued and outstanding		i —		i —
Class A ordinary shares, $ i i 0.0001 / par value, i i 500,000,000 / shares authorized; i i 0 / shares issued and outstanding (excluding i i 23,000,000 / shares subject to possible redemption)		i —		i —
Class B ordinary shares, $ i i 0.0001 / par value, i i 50,000,000 / shares authorized; i i 5,750,000 / shares issued and outstanding		i 575		i 575
Additional paid-in capital		—		—
Accumulated deficit		( i 11,138,481)		( i 20,691,372)
Total Shareholders’ Equity (Deficit)		( i 11,137,906)		( i 20,690,797)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	$	i 235,901,851	$	i 235,947,785

The accompanying notes are an integral part of the unaudited condensed financial statements.

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7 ACQUISITION CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

For the

Period From

March 4, 2021

(Inception)

Three Months Ended

Six Months Ended

Three Months Ended

Through

June 30,

2022

2021

Formation and operating costs

$

i 294,245

$

i 628,316

$

—

$

i 6,000

Loss from operations

( i 294,245)

( i 628,316)

—

( i 6,000)

Other income:

Change in fair value of warrant liability

i 3,234,000

i 10,181,000

—

Unrealized gain on marketable securities held in Trust Account

i 333,200

i 352,347

—

Interest income on checking account

i 207

—

Other income

i 3,567,407

i 10,533,554

—

Net income (Loss)

$

i 3,273,162

$

i 9,905,238

$

—

$

( i 6,000)

Basic and diluted weighted average shares outstanding, Class A ordinary shares

i 23,000,000

—

Basic and diluted net income (loss) per share, Class A ordinary shares

$

i 0.11

$

i 0.34

—

Basic and diluted weighted average shares outstanding, Class B ordinary shares

i 5,750,000

i 5,000,000

Basic and diluted net income (loss) per share, Class B ordinary shares

$

i 0.11

$

i 0.34

—

( i 0.00)

The accompanying notes are an integral part of the unaudited condensed financial statements.

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7 ACQUISITION CORPORATION

CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(Unaudited)

For the Three And Six Months Ended June 30, 2022

Class A

Ordinary Shares Subject to

Class B

Additional

Total

Possible Redemption

Ordinary Shares

Paid-in

Accumulated

Shareholders’

Shares

Amount

Shares

Amount

Capital

Deficit

Balance — December 31, 2021

i 23,000,000

$

i 234,602,881

i 5,750,000

$

i 575

$

—

$

( i 20,691,372)

$

( i 20,690,797)

Adjustment of Class A ordinary shares to redemption value

—

i 19,147

—

( i 19,147)

Net income

—

i 6,632,076

Balance — March 31, 2022

i 23,000,000

i 234,622,028

i 5,750,000

i 575

—

( i 14,078,443)

( i 14,077,868)

Adjustment of Class A ordinary shares to redemption value

—

i 333,200

—

( i 333,200)

Net income

—

i 3,273,162

Balance — June 30, 2022

i 23,000,000

$

i 234,955,228

i 5,750,000

$

i 575

$

—

$

( i 11,138,481)

$

( i 11,137,906)

For the period from March 4, 2021 (inception) through June 30, 2021

Class A

Ordinary Shares Subject to

Class B

Additional

Total

Possible Redemption

Ordinary Shares

Paid-in

Accumulated

Shareholder’s

Shares

Amount

Shares

Amount

Capital

Deficit

Equity

Balance — March 4, 2021 (inception)

—

$

—

i —

$

i —

$

i —

$

i —

$

i —

Issuance of Class B Ordinary Shares to Sponsor

—

i 5,750,000

i 575

i 24,425

—

i 25,000

Net loss

—

( i 6,000)

Balance — March 31, 2021

—

i 5,750,000

$

i 575

$

i 24,425

$

( i 6,000)

$

i 19,000

Net loss

—

Balance — June 30, 2021

—

$

—

i 5,750,000

$

i 575

$

i 24,425

$

( i 6,000)

$

i 19,000

The accompanying notes are an integral part of the unaudited condensed financial statements.

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7 ACQUISITION CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


			For the Period From
	Six Months Ended		March 4, 2021 (Inception)
	June 30, 2022		Through June 30, 2021
Cash Flows from Operating Activities:
Net income (loss)	$	i 9,905,238	$	( i 6,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Unrealized gain on marketable securities held in Trust Account		( i 352,347)		—
Change in fair value of warrant liability		( i 10,181,000)		—
Changes in operating assets and liabilities:
Prepaid expenses		i 165,134		—
Accounts payable and accrued expenses		i 246,618		i 6,000
Net cash used in operating activities		( i 216,357)		—

Cash Flows from Financing Activities:
Payment of promissory note		( i 16,790)		—
Net cash used in financing activities		( i 16,790)		—

Net Change in Cash		( i 233,147)		i —
Cash – Beginning		i 660,773		i —
Cash – Ending	$	i 427,626	$	i —

Supplemental disclosure of non-cash financing activities:
Adjustment of Class A ordinary shares subject to possible redemption	$	i 352,347	$	—
Deferred offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares	$	—	$	i 25,000

The accompanying notes are an integral part of the unaudited condensed financial statements.

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7 ACQUISITION CORPORATION

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

i

Note 1 — Organization and Business Operations

Organization and General

7 Acquisition Corporation (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 4, 2021. The Company was incorporated for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with i one or more businesses (the “Business Combination”) that the Company has not yet identified.

The Company is not limited to a particular industry or geographic location for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

Sponsor and Initial Financing

As of June 30, 2022, the Company had not commenced any operations. All activity through June 30, 2022 relates to the Company’s formation, the initial public offering (the “Initial Public Offering” or “IPO”), which is described below, and identifying a target for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.

The registration statement for the Initial Public Offering was declared effective on November 4, 2021. On November 9, 2021, the Company consummated the Initial Public Offering of i 23,000,000 units (the “Units” and, with respect to the shares of Class A ordinary shares included in the Units sold, the “Public Shares”), which includes the exercise by the underwriter of its over-allotment option in the amount of i 3,000,000 Units, at $ i 10.00 per Unit, generating gross proceeds of $ i 230,000,000, which is described in Note 3.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of i 11,350,000 warrants (each, a “Private Placement Warrant” and, collectively, the “Private Placement Warrants”) at a price of $ i 1.00 per Private Placement Warrant in a private placement to 7 Acquisition Holdings, LLC (the “Sponsor”) and certain funds and accounts managed by subsidiaries of BlackRock, Inc. (the “Anchor Investors”), generating gross proceeds of $ i 11,350,000, which is described in Note 4.

Transaction costs related to the consummation of the IPO on November 9, 2021 amounted to $ i 24,551,888, consisting of $ i 4,600,000 of underwriting discount, $ i 8,050,000 of deferred underwriting fees, $ i 11,215,019 excess fair value of founder shares and $ i 686,869 of other offering costs. In addition, on November 9, 2021, cash of approximately $ i 2,111,900 was held outside of the Trust Account (as defined below) and was available for the payment of offering costs and for working capital purposes.

The Trust Account

Following the closing of the Initial Public Offering on November 9, 2021 (“IPO Closing Date”), an amount of $ i 234,600,000 ($ i 10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”). The funds in the Trust Account was invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended. The Company will not be permitted to withdraw any of the principal or interest held in the Trust Account except for the withdrawal of interest to pay taxes, if any. The funds held in the Trust Account will not otherwise be released from the trust account until the earliest of: (i) the Company’s completion of a Business Combination; (ii) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend the Company’s amended and restated certificate of incorporation; and (iii) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination within i 18 months from November 9, 2021 (or any extended period of time that the Company may have to complete an initial Business Combination as a result of an amendment to its Amended and Restated Memorandum and Articles of Association) (the “Combination Period”).

/

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Business Combination

The Company’s management has broad discretion with respect to the specific application of the net proceeds from the Initial Public Offering, although substantially all of the net proceeds from the Initial Public Offering are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a Target Business. As used herein, “Target Business” means one or more target businesses that together have an aggregate fair market value equal to at least i 80% of the value of the assets held in the Trust Account (excluding taxes payable on the interest earned on the trust account) at the time of the signing of a definitive agreement in connection with a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination.

The Company will provide its public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination, either (i) in connection with a shareholder meeting called to approve such Business Combination or (ii) by means of a tender offer. The public shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account, calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations. The per-share amount to be distributed to the public shareholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 6). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. As a result, shares are recorded at their redemption amount and classified as temporary equity, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity” (“ASC 480”).

The decision as to whether the Company will seek shareholder approval of a Business Combination or will allow shareholders to sell their shares in a tender offer will be made by the Company, in its sole discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek shareholder approval unless a vote is required by law or stock exchange listing requirements. If the Company seeks shareholder approval, it will complete its Business Combination only if a majority of the shares of ordinary shares voted are voted in favor of a Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $ i 5,000,001 upon consummation of a Business Combination. In such case, the Company would not proceed with the redemption of its Public Shares and the related Business Combination, and instead may search for an alternate Business Combination.

The Company has until May 9, 2023 to complete its initial Business Combination. If the Company does not complete a Business Combination by such date (or such longer period as provided in an amendment to the Company’s Amended and Restated Memorandum and Articles of Association (an “Extension Period”)), it shall (i) cease all operations except for the purposes of winding up; (ii) as promptly as reasonably possible but not more than 10 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 (less up to $ i 100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by the number of then issued and outstanding Public Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders and its board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman 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 the Company’s warrants, which will expire worthless if the Company fails to complete its initial Business Combination by May 9, 2023, or during any Extension Period. The initial shareholders have entered into a letter agreement with the Company, pursuant to which they have waived their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination by May 9, 2023, or during any Extension Period. However, if the initial shareholders acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete its initial Business Combination by May 9, 2023, or during any Extension Period.

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The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent auditors) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $ i 10.20 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, due to reductions in value of the trust assets, in each case net of the amount of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act. In the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to have all third parties, including, but not limited to, all vendors, service providers (other than its independent registered public accounting firm), prospective target businesses and other entities with which the Company does business execute agreements with the Company waiving any right, title, interest or claims of any kind in or to any monies held in the Trust Account.

Liquidity, Capital Resources and Going Concern

As of June 30, 2022 and December 31, 2021 , the Company had $ i 427,626 and $ i 660,773 in operating cash, respectively, and working capital of $ i 483,847 and $ i 929,956, respectively.

The Company’s liquidity needs up to June 30, 2022 had been satisfied through a payment from the Sponsor of $ i 25,000 for Class B ordinary shares, par value $ i 0.0001 per share (“Class B ordinary shares” or “Founder Shares”) (see Note 5), the Initial Public Offering and the issuance of the Private Placement Warrants. Additionally, the Company drew on an unsecured promissory note to pay certain offering costs.

Prior to the completion of the IPO, the Company lacked the liquidity it needed to sustain operations for a reasonable period of time. The Company has since completed its IPO at which time capital in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the Company for general working capital purposes.

The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed (defined in Note 5 below). Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that (i) new financing will be available to it on commercially acceptable terms, if at all, or (ii) that its plans to consummate an initial Business Combination will be successful. The Company has until May 9, 2023 to complete its initial Business Combination. The Company will mandatorily liquidate in the event it is unable to complete its initial Business Combination. In addition, management is currently evaluating the impact of the COVID-19 pandemic and its effect on the Company’s financial position, results of its operations and/or search for a target company.

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date the financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Risks and Uncertainties

The Company continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Note 2 — Summary of Significant Accounting Policies

i

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 17, 2022, which contains the audited financial statements and notes thereto, and the Company’s prospectus for its Initial Public Offering for the period from March 4, 2021 (inception) through June 30, 2021 as filed with the SEC on November 8, 2021. The financial information as of December 31, 2021 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The financial information for the period from March 4, 2021 (inception) through June 30, 2021 is derived from financial statements presented in the Company’s prospectus for its Initial Public Offering. The interim results for the three and six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods.

i

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

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Use of Estimates

The preparation of the condensed financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

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Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant accounting estimates included in these financial statements is the determination of the fair value of the warrant liabilities. Such estimates may be subject to change as more current information becomes available. Accordingly, the actual results could differ significantly from those estimates.

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Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did i i no / t have any cash equivalents as of June 30, 2022 and December 31, 2021, respectively.

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Marketable Securities Held in Trust Account

Following the closing of the Initial Public Offering on November 9, 2021, an amount of $ i 234,600,000 from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants were placed in the Trust Account and may be invested only in U.S. government securities 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 direct U.S. government treasury obligations. The Trust Account is intended as a holding place for funds pending the earliest to occur of: (i) the completion of the initial Business Combination; (ii) the redemption of any public shares properly submitted in connection with a shareholder vote to amend the Company’s Amended and Restated Memorandum and Articles of Association (A) to modify the substance or timing of the Company’s obligation to provide holders of its Class A ordinary shares the right to have their shares redeemed in connection with its initial business combination or to redeem i 100% of the Company’s public shares if it does not complete its initial business combination within i 18 months from the closing of its initial public offering or (B) with respect to any other provision relating to the rights of holders of the Company’s Class A ordinary shares; or (iii) absent its completing a Business Combination within i 18 months from the closing of its Initial Public Offering, its return of the funds held in the trust account to its public shareholders as part of its redemption of the Public Shares. As of June 30, 2022, substantially all of the assets held in the Trust Account were held in money market funds which invest in United States Treasury securities. Through June 30, 2022, the Company has not withdrawn any monies from the Trust Account.

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Offering Costs

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A—“Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are charged to shareholders’ deficit or the statement of operations based on the relative value of the Public Warrants and the Private Placement Warrants to the proceeds received from the Units sold upon the completion of the IPO. Accordingly, on November 9, 2021, offering costs totaling $ i 24,551,888 (consisting of $ i 4,600,000 of underwriting fees, $ i 8,050,000 of deferred underwriting fees, $ i 11,215,019 excess fair value of Founder Shares and $ i 686,869 of actual offering costs, with $ i 1,782,165 included in accumulated deficit as an allocation for the Public Warrants and the Private Placement Warrants, and $ i 22,769,723 included as a reduction to proceeds.

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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 “Distinguishing Liabilities from Equity.” 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, ordinary shares is classified as shareholders’ equity. The Company’s Class A ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 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.

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Income Taxes

The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statements recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were i i no / unrecognized tax benefits and i i no / amounts accrued for interest and penalties as of June 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is considered an exempted Cayman Islands company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.

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Net Income per Ordinary Share

Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. Ordinary shares subject to possible redemption at June 30, 2022, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income 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 i 11,350,000 Private Placement Warrants in the calculation of diluted income 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 income per ordinary share is the same as basic net income per ordinary share for the periods presented.

The Company’s statements of operations includes a presentation of net income per ordinary share subject to possible redemption and allocates the net income into the two classes of stock in calculating net earnings per ordinary share, basic and diluted. For redeemable Class A ordinary shares, net income per ordinary share is calculated by dividing the net income by the weighted average number of Class A ordinary shares subject to possible redemption outstanding since original issuance. For non-redeemable Class B ordinary shares, net income per share is calculated by dividing the net income by the weighted average number of non-redeemable Class B ordinary shares outstanding for the period. Nonredeemable 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. As of June 30, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.

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The following table reflects the calculation of basic and diluted net income per ordinary share (in dollars, except per share amounts):


	Three Months		Six Months
	Ended		Ended
	June 30, 2022		June 30, 2022
Class A ordinary shares subject to possible redemption
Numerator: Income attributable to Class A ordinary shares subject to possible redemption
Net income	$	i 2,618,530	$	i 7,924,190
Net income attributable to Class A ordinary shares subject to possible redemption	$	i 2,618,530	$	i 7,924,190
Denominator: Weighted average Class A ordinary shares subject to possible redemption
Basic and diluted weighted average shares outstanding, Class A ordinary shares subject to possible redemption		i 23,000,000		i 23,000,000
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption	$	i 0.11	$	i 0.34

Non-Redeemable Class B ordinary shares
Numerator: Net income
Net income	$	i 654,632	$	i 1,981,048
Non-redeemable net income	$	i 654,632	$	i 1,981,048
Denominator: Weighted average non-redeemable Class B ordinary shares
Basic and diluted weighted average shares outstanding, non-redeemable Class B ordinary shares		i 5,750,000		i 5,750,000
Basic and diluted net income per share, non-redeemable Class B ordinary shares	$	i 0.11	$	i 0.34

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Related Parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

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Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage of $ i 250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

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Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

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Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

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Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

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Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

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Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

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Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

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Warrant Liabilities

The Company accounts for the Public Warrants and Private Placement Warrants exercisable for the Company’s ordinary shares that are not indexed to its own shares as liabilities at fair value on the balance sheet. The Public Warrants and Private Placement Warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the Public Warrants and Private Placement Warrants. At that time, the portion of the warrant liability related to the Public Warrants and Private Placement Warrants will be reclassified to additional paid-in capital.

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Recent Accounting Pronouncements

In August 2020, the FASB 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 on January 1, 2022, with early adoption permitted. The Company is currently assessing the impact, if any, that ASU 2020-06 would have on its financial position, results of operations or cash flows.

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s condensed financial statements.

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Note 3 — Initial Public Offering

On November 9, 2021, pursuant to the Initial Public Offering, the Company sold i 23,000,000 Units, which includes the full exercise by the underwriter of its over-allotment option in the amount of i 3,000,000 Units, at a price of $ i 10.00 per Unit. Each Unit consists of i one share of Class A ordinary shares and one-half of one warrant (each whole warrant, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase i one Class A ordinary share at an exercise price of $ i 11.50 per share, subject to adjustment (see Note 7).

An aggregate of $ i 10.20 per Unit sold in the IPO was held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

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Note 4 — Private Placement

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of i 11,350,000 Private Placement Warrants at a price of $ i 1.00 per warrant ($ i 11,350,000 in the aggregate) in a private placement.

Each whole private placement warrant (the “Private Placement Warrants”) is exercisable for i one whole Class A ordinary share at a price of $ i 11.50 per share. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.

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Note 5 — Related Party Transactions

Founder shares

On March 8, 2021, the Sponsor purchased i 8,625,000 shares of the Company’s Class B ordinary shares (the “Founder Shares”) for an aggregate purchase price of $ i 25,000. On October 14, 2021, the Sponsor surrendered i 2,875,000 Founder Shares to us for no consideration resulting in an aggregate of i 5,750,000 Founder Shares outstanding.

The Sponsor has agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) i one year after the completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $ i 12.00 per share (as adjusted for share sub-divisions, share reorganizations, recapitalizations and the like) for any i 20 trading days within any i 30-trading day period commencing at least i 150 days after a Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their Class A ordinary shares for cash, securities or other property.

On March 26, 2021, the Sponsor entered into agreements to transfer i 20,000 founder shares to each of the six independent directors ( i 120,000 founder shares in aggregate). The shares were transferred at $ i 0.001 per share.

On October 19, 2021, the Sponsor entered into certain transfer and subscription agreements with certain funds and accounts managed by subsidiaries of BlackRock, Inc., which are the Anchor Investors in the IPO.

At the closing of the business combination, the Anchor Investors will be entitled to purchase from the Sponsor an aggregate of up to i 25% of the number of outstanding founder shares at the original purchase price that the Sponsor paid for the Founder Shares. The Sponsor has agreed to transfer the Founder Shares to the Anchor Investors after the completion of a Business Combination. If the Anchor Investors do not own at least i 9.8% of the Public Shares at certain determination dates (as described in the transfer and subscription agreements), then up to i 50% of the founder shares entitled to be purchased by the Anchor Investors may be forfeited. Up to i 25% of the founder shares entitled to be purchased by the Anchor Investors may also be subject to forfeiture and/or other conditions (including earn-outs) on a pro rata basis with the Sponsor during the business combination process. However, in no event will the Anchor Investors be required to forfeit or otherwise be subject to limitations on i 50% of the founder shares they will be entitled to purchase (see Note 9). The Company estimated the aggregate fair value of the Founder Shares attributable to the Anchor Investors to be approximately $ i 11,221,269, or $ i 7.81 per share.

The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, the offering cost was allocated to the separable financial instruments issued in the IPO based on the “with and without” method, compared to total proceeds received. Offering costs allocated to derivative warrant liabilities were expensed at the date of IPO in the statement of operations. Offering costs allocated to the Public Shares were charged to shareholders’ deficit upon the completion of the IPO.

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Promissory note-related party

On March 8, 2021, the Company issued an unsecured promissory note to the Sponsor (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $ i 300,000. The Promissory Note was non-interest bearing and payable on the earlier of December 31, 2021, or the completion of the IPO. As of June 30, 2022 and December 31, 2021, there were $ i 0 and $ i 16,790, respectively, that were outstanding under the Promissory Note.

Working Capital Loans

In order to finance transaction costs in connection with a Business Combination, the Sponsor, certain of the Company’s officers, directors or any of their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company 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. The Working Capital Loans would either be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $ i 1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $ i 1.00 per warrant. The warrants would be identical to the Private Placement Warrants. As of June 30, 2022 and December 31, 2021, i i no / Working Capital Loans were outstanding.

Administrative support agreement

Commencing on the date that the Company’s securities are first listed on the Nasdaq Global Market, the Company agreed to pay the Sponsor a total of $ i 2,500 per month for office space, secretarial and administrative services provided to the Company. The Sponsor has waived the administrative services agreement fee and has not paid any amount through June i 30, i 2022.

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Note 6 — Shareholders’ Equity (Deficit)

Preference shares - The Company is authorized to issue up to i i 5,000,000 / preference shares with a par value of $ i i 0.0001 / per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2022 and December 31, 2021, there were i i no / preferred shares issued or outstanding.

Class A ordinary shares - The Company is authorized to issue up to i i 500,000,000 / Class A ordinary shares with a par value of $ i i 0.0001 / per share. Holders of the Company’s Class A ordinary shares are entitled to i one vote for each share. At June 30, 2022 and December 31, 2021, there were i i no / shares of Class A Ordinary Shares issued or outstanding, excluding i i 23,000,000 / shares subject to possible redemption as presented in temporary equity.

Class B ordinary shares - The Company is authorized to issue up to i i 50,000,000 / Class B ordinary shares with a par value of $ i i 0.0001 / per share. At June 30, 2022 and December 31, 2021, there were i i 5,750,000 / Class B ordinary shares issued and outstanding.

Ordinary shareholders of record are entitled to i one vote for each share held on all matters to be voted on by shareholders and holders of Class A ordinary shares and holders of Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the shareholders except as required by law; provided that only holders of Class B ordinary shares will have the right to vote on the appointment of directors prior to or in connection with the completion of the initial Business Combination.

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The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of a Business Combination on a one-for-one basis, subject to adjustment. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of a Business Combination, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, i 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the IPO plus all Class A ordinary shares and equity-linked securities issued or deemed issued by the Company in connection with or in relation to the completion of the initial Business Combination, any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, or to be issued, to any seller in the initial Business Combination and any private placement warrants issued to the Sponsor upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.

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Note 7 — Warrants

The Company accounts for the i 22,850,000 warrants that were issued in the IPO (representing i 11,500,000 Public Warrants and i 11,350,000 Private Placement Warrants) in accordance with the 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. Accordingly, the Company will classify each warrant as a liability at its fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.

Warrants — Public Warrants may only be exercised for a whole number of Class A ordinary shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Accordingly, unless holders purchase at least two Units, they will not be able to receive or trade a whole warrant. The Public Warrants will become exercisable i 30 days after the completion of a Business Combination.

The Company will not be obligated to deliver any Class A Ordinary Shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act with respect to the Class A Ordinary Shares issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrant will be exercisable, and the Company will not be obligated to issue any Class A Ordinary Shares upon exercise of a Public Warrant unless the Class A Ordinary Share issuable upon such Public Warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the Public Warrants.

The Company has agreed that as soon as practicable, but in no event later than i 20 business days after the closing of a Business Combination, it will use its commercially reasonable efforts to file with the SEC a registration statement covering registration under the Securities Act, of the Class A ordinary shares issuable upon exercise of the Public Warrants, and the Company will use its commercially reasonable efforts to cause the same to become effective within i 60 business days after the closing of a Business Combination, and to maintain the effectiveness of such registration statement and a current prospectus relating to those Class A ordinary shares until the Public Warrants expire or are redeemed, as specified in the warrant agreement; provided that if the Class A ordinary shares is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. If a registration statement covering the Class A ordinary share issuable upon exercise of the Public Warrants is not effective by the i 60th day after the closing of a Business Combination, Public Warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise Public Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but the Company will use its commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

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Redemption of warrants for cash: Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

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in whole and not in part;

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at a price of $ i 0.01 per warrant;

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upon not less than i 30 days’ prior written notice of redemption to each warrant holder;

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if, and only if, the last reported sale price (the “closing price”) of the Class A ordinary share equals or exceeds $ i 18.00 per share (as adjusted) for any i 20 trading days within a i 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and

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if the closing price of the Class A ordinary shares for any i 20 trading days within a i 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $ i 18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

If and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

Redemption of warrants for ordinary shares: Once the Public Warrants become exercisable, the Company may redeem the Public Warrants:

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in whole and not in part;

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at a price of $ i 0.10 per warrant;

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upon a minimum of i 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of Class A shares to be determined by reference to an agreed table based on the redemption date and the “fair market value” of the Class A ordinary shares; and

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if, and only if, the last reported sale price of the Class A ordinary share equals or exceeds $ i 10.00 per share (as adjusted per share sub-divisions, share dividends, reorganizations, reclassifications, recapitalizations and the like) for any i 20 trading days within the i 30- trading day period ending i three trading days before the Company send the notice of redemption to the warrant holders.

In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $ i 9.20 per Class A ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than i 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the i 20 trading day period starting on the trading day prior to the day on which the Company consummates a Business Combination (such price, the “Market Value”) is below $ i 9.20 per share, then the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to i 115% of the higher of the Market Value and the Newly Issued Price, the $ i 18.00 per share redemption trigger price and the “Redemption of Warrants for ordinary shares” described above will be adjusted (to the nearest cent) to be equal to i 180% of the higher of the Market Value and the Newly Issued Price, and the $ i 10.00 per share redemption trigger price described above under “Redemption of Warrants for ordinary shares” will be adjusted (to the nearest cent) to be equal to the higher of the Market Value and the Newly Issued Price.

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The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the IPO, except that the Private Placement Warrants and the Class A ordinary shares issuable upon the exercise of the Private Placement Warrants are subject to certain transfer restrictions contained in the letter agreement by and among the company, the sponsor and the other parties thereto, as amended from time to time. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable (except for a number of Class A ordinary shares as described above under Redemption of warrants for Class A ordinary shares).

If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A ordinary shares and upon completion of such offer, the offeror owns beneficially more than 50% of the outstanding Class A ordinary shares, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant had been exercised, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to the offer. If less than 70% of the consideration receivable by the holders of the Class A ordinary shares in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial Markets.

The Company accounts for the Public Warrants and Private Placement Warrants as liabilities in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity. Because the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the shareholders also receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants are recorded as derivative liability.

Additionally, certain adjustments to the settlement amount of the Private Placement Warrants are based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815 40, and thus the Private Placement Warrants are not considered indexed to the Company’s own stock and not eligible for an exception from derivative accounting.

The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the issuance of the warrants at the closing of our initial public offering. Accordingly, the Company expects to classify each warrant as a liability at its fair value. The Public Warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined by the Monte Carlo simulation. The warrant liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations. The Company will reassess the classification of the warrants at each balance sheet date. If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

i

Note 8 — Commitments and Contingencies

Registration Rights and Shareholder Rights

The holders of the Founder Shares, Private Placement Warrants, warrants that may be issued upon conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement that was signed on the effective date of the IPO, requiring the Company to register such securities for resale. The holders of these securities are entitled to make up to i three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

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Underwriting agreement

The Company granted the underwriter a i 45 -day option from the date of the IPO to purchase up to i 3,000,000 additional Units to cover over-allotments at the IPO price less the underwriting discount. The underwriter exercised the over-allotment option in full, generating an additional $ i 30,000,000 in gross proceeds. As a result of the over-allotment being exercised in full, the Sponsor did not forfeit any Founder Shares back to the Company.

The underwriter was paid a cash underwriting discount of $ i 4,600,000 in the aggregate at the closing of the IPO. In addition, $ i 0.35 per Unit, or $ i 8,050,000 in the aggregate, is payable to the underwriter for deferred underwriting commissions. The deferred fee is payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

i

Note 9 — Fair Value Measurements

At June 30, 2022 and December 31, 2021, the Company’s warrant liability was valued at $ i 3,697,000 and $ i 13,878,000, respectively. Under the guidance in ASC 815-40, the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment. As such, the Public Warrants and the Private Placement Warrants must be recorded on the balance sheet at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The following table presents fair value information as of June 30, 2022 and December 31, 2021, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the private warrant liability is classified within Level 3 of the fair value hierarchy. The Company’s transferred the fair value of Public Warrants from a Level 3 measurement to a Level 1 measurement as a result of the Public Warrants detaching from the Units and becoming separately tradable:

i


			Private
	Public		Placement		Warrant
	Warrants		Warrants		Liability
Derivative warrant liabilities at March 4, 2021 (inception)	$	—	$	—	$	—
Initial fair value at issuance of public and private placement warrants		i 11,719,000		i 11,693,000		i 23,412,000
Change in fair value		( i 4,819,000)		( i 4,715,000)		( i 9,534,000)
Transfer of public warrants to Level 1 measurement		( i 6,900,000)		—		( i 6,900,000)
Level 3 derivative warrant liabilities as of December 31, 2021		—		i 6,978,000		i 6,978,000
Change in fair value		—		( i 3,497,000)		( i 3,497,000)
Level 3 derivative warrant liabilities as of March 31, 2022		—		i 3,481,000		i 3,481,000
Change in fair value		—		( i 1,624,000)		( i 1,624,000)
Level 3 derivative warrant liabilities as of June 30, 2022	$	—	$	i 1,857,000	$	i 1,857,000

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The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The following tables set forth by level within the fair value hierarchy the Company’s assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2022 and December 31, 2021:

i


June 30, 2022
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and marketable securities held in trust account	$	i 234,955,228	$	—	$	—
Liabilities
Public Warrants	$	i 1,840,000	$	—	$	—
Private Placement Warrants	$	—	$	—	$	i 1,857,000


December 31, 2021
	(Level 1)		(Level 2)		(Level 3)
Assets
Cash and marketable securities held in trust account	$	i 234,602,881	$	—	$	—
Liabilities
Public Warrants	$	i 6,900,000	$	—	$	—
Private Placement Warrants	$	—	$	—	$	i 6,978,000

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The following table presents the changes in the fair value of derivative warrant liabilities from March 4, 2021 (inception) through June 30, 2022:


	Public		Private Placement		Total Derivative
	Warrants		Warrants		Warrant Liability
Derivative warrant liabilities as of March 4, 2021 (inception)	$	—	$	—	$	—
Initial fair value at issuance of public and private placement warrants		i 11,719,000		i 11,693,000		i 23,412,000
Change in fair value		( i 4,819,000)		( i 4,715,000)		( i 9,534,000)
Derivative warrant liabilities as of December 31, 2021		i 6,900,000		i 6,978,000		i 13,878,000
Change in fair value		( i 3,450,000)		( i 3,497,000)		( i 6,947,000)
Derivative warrant liabilities as of March 31, 2022		i 3,450,000		i 3,481,000		i 6,931,000
Change in fair value		( i 1,610,000)		( i 1,624,000)		( i 3,234,000)
Derivative warrant liabilities as of June 30, 2022	$	i 1,840,000	$	i 1,857,000	$	i 3,697,000

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Measurement

The Company established the initial fair value for the warrants on November 9, 2021, the date of the completion of the Company’s IPO. The Company used a Monte Carlo simulation model to value the warrants. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one Class A Ordinary Share and one-half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B Ordinary Shares, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A Ordinary Shares subject to possible redemption (temporary equity), Class A Ordinary Shares (permanent equity) and Class B Ordinary Shares (permanent equity) based on their relative fair values at the initial measurement date.

The key inputs into the Monte Carlo simulation model formula were as follows at December 31, 2021 and June 30, 2022:

i


	Private Placement Warrants
	December 31,			June 30,
Input	2021			2022
Ordinary share price	$	i 9.86		$	i 9.95
Exercise price	$	i 11.50		$	i 11.50
Risk-free rate of interest		i 1.33	%		i 3.00	%
Volatility		i 10.79	%		i 2.57	%
Term		i 5.85			i 5.75
Warrant to buy one share (unadjusted for the probability of dissolution)	$	i 0.61		$	i 0.16
Dividend yield		i 0.00	%		i 0.00	%

/

The risk-free interest rate assumption was based on the linearly interpolated Treasury Constant Maturity Rate Curve between five and seven year rates, which was commensurate with the contractual term of the Warrants, which expire on the earlier of (i) six years after the completion of the initial business combination and (ii) upon redemption or liquidation. An increase in the risk-free interest rate, in isolation, would result in an increase in the fair value measurement of the warrant liabilities and vice versa.

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Note 10 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us” or “we” refer to 7 Acquisition Corporation. 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 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 Quarterly Report includes “forward-looking statements” 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 Quarterly Report including, without limitation, 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. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the “Item 1A. Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Form 10-K”), filed with the U.S. Securities and Exchange Commission (the “SEC”). 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 newly incorporated blank check company formed as a Cayman Islands exempted company whose business purpose is to effect a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses or entities. We have not identified any business combination partner and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with respect to any potential business combination with us.

Our sponsor is 7 Acquisition Holdings, LLC (“Sponsor”). The registration statement for our Initial Public Offering was declared effective on November 4, 2021. On November 9, 2021, we consummated the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Class A ordinary shares” or “public shares”), including the issuance of 3,000,000 Units as a result of the underwriter’s exercise of its over-allotment option, at $10.00 per Unit, generating gross proceeds of approximately $230,000,000, and incurring offering costs of approximately $24,551,888, consisting of $4,600,000 of underwriting discount, $8,050,000 deferred underwriting commissions, $686,869 of actual offering costs, and $11,215,019 excess fair value of anchor investor shares.

Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 11,350,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.00 per Private Placement Warrant with our Sponsor, generating gross proceeds of approximately $11,350,000.

Following the closing of the Initial Public Offering, the full exercise of the over-allotment option and the sale of the Private Placement Warrants, an amount of $234,600,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”).

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We have until May 9, 2023 to consummate a Business Combination (the “Combination Period”) (or such longer period as provided in an amendment to the Company’s Amended and restated certificate of incorporation (an “Extension Period”)). However, if we have not completed a Business Combination within the Combination Period, we 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 100% of 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 and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish the rights of the public shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining public shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

Results of Operations

Our entire activity from March 4, 2021 (inception) through June 30, 2022 relates to our formation, the Initial Public Offering and, since the closing of the Initial Public Offering, a search for a Business Combination candidate. We will not be generating any operating revenues until the closing and completion of our Business Combination at the earliest.

For the three months ended June 30, 2022, we had net income of $3,273,162, which consisted of $294,245 of formation and operating expenses, offset by a gain of $3,234,000 for the change in fair value of the warrant liability and an unrealized gain of $333,200 on marketable securities held in trust, and $207 of interest earned on the checking account. In comparison, for the three months ended June 30, 2021, we had had net loss of $6,000, which consisted of $6,000 of formation and operating expenses.

For the six months ended June 30, 2022, we had net income of $9,905,238, which consisted of $628,316 of formation and operating expenses, offset by a gain of $10,181,000 for the change in fair value of the warrant liability and an unrealized gain of $352,347 on marketable securities held in trust, and $207 of interest earned on the checking account. In comparison, for the period from March 4, 2021 (inception) through June 30, 2021, we had had net loss of $6,000, which consisted of $6,000 of formation and operating expenses.

Liquidity, Capital Resources and Going Concern

As of June 30, 2022, the Company had $427,626 in operating cash and working capital of $483,847 compared to $0 in operating cash and working capital deficiency of $31,000 for the period from March 4, 2021 (inception) through June 30, 2021.

The Company’s liquidity needs up to November 9, 2021 had been satisfied through a payment from the Sponsor of $25,000 for Class B ordinary shares, par value $0.0001 per share (“Class B ordinary shares” and shares thereof, “Founder Shares”) (see Note 5), the Initial Public Offering and the issuance of the Private Placement Warrants. Additionally, the Company drew on an unsecured promissory note to pay certain offering costs.

Following the Initial Public Offering, the full exercise of the over-allotment option and the sale of the Private Placement Warrants, a total of $234,600,000 was placed in the Trust Account. We incurred $24,551,888 in transaction costs, $4,600,000 of underwriting discounts and commissions, $8,050,000 of deferred underwriting fees, $686,869 of other offering costs, and $11,215,019 excess fair value of anchor investor shares.

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 deferred underwriting fees and 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.

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 an Initial Business Combination.

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In order to fund working capital deficiencies or finance transaction costs in connection with an Initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete an Initial Business Combination, we may repay such loaned amounts out of the proceeds of the Trust Account released to us. In the event that an 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 warrants at a price of $1.00 per warrant at the option of the lender. The 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 an 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 to complete our Initial Business Combination, either because the transaction requires more cash than is available from the proceeds held in our Trust Account, or because we become obligated to redeem a significant number of our public shares upon completion of the business combination, in which case we may issue additional securities or incur debt in connection with such business combination. If we have not consummated our initial business combination within the required time period because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 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. The administrative services agreement to pay the Sponsor a monthly fee of $2,500 for office space, operational support and secretarial and administrative services has been waived by the Sponsor. The Company has not paid any amounts under this agreement as of June 30, 2022.

The underwriter of the IPO is entitled to a deferred discount of $0.35 per Unit, or $8,050,000 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 and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States 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 as our critical accounting policies:

Warrant Liabilities

The Company accounts for the Public Warrants and Private Placement Warrants exercisable for the Company’s ordinary shares that are not indexed to its own shares as liabilities at fair value on the balance sheet. The Public Warrants and Private Placement Warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the Public Warrants and Private Placement Warrants. At that time, the portion of the warrant liability related to the Public Warrants and Private Placement Warrants will be reclassified to additional paid-in capital.

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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 “Distinguishing Liabilities from Equity.” 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, ordinary shares is classified as shareholders’ equity. The Company’s Class A ordinary shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 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 income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period. Ordinary shares subject to possible redemption at June 30, 2022, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income 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 11,350,000 Private Placement Warrants in the calculation of diluted income 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 income per ordinary share is the same as basic net income per ordinary share for the periods presented.

The Company’s statements of operations includes a presentation of net income per ordinary share subject to possible redemption and allocates the net income into the two classes of stock in calculating net earnings per ordinary share, basic and diluted. For redeemable Class A ordinary shares, net income per ordinary share is calculated by dividing the net income by the weighted average number of Class A ordinary shares subject to possible redemption outstanding since original issuance. For non-redeemable Class B ordinary shares, net income per share is calculated by dividing the net income by the weighted average number of non-redeemable Class B ordinary shares outstanding for the period. Nonredeemable 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. As of June 30, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into ordinary shares and then share in the earnings of the Company. As a result, diluted net income per ordinary share is the same as basic net income per ordinary share for the periods presented.

Recent Accounting Pronouncements

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 on January 1, 2022, with early adoption permitted. 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 pronouncements, if currently adopted, would have a material effect on our balance sheet.

Impact of COVID-19

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that COVID-19 could have a negative effect on our financial position, results of operations and/or search for a target company, the specific impact is not readily determinable as of the balance sheet date. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Off-Balance Sheet Arrangements

As of June 30, 2022, we did not have any off-balance sheet arrangements.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act of 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 qualify as an “emerging growth company” under the JOBS Act and are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We elected 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 a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an “emerging growth company,” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board 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 comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five (5) years following the completion of our IPO or until we otherwise no longer qualify as an “emerging growth company.”

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our co-principal executive officers and principal financial officer, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our co-principal executive officers and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of three and six months ended June 30, 2022, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our co-principal executive officers and principal financial officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of June 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three and six months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider our risk factors from those disclosed under “Item 1A. Risk Factors” included in our Form 10-K and our Quarterly Report on Form 10-Q filed with the SEC on May 16, 2022. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

As of the date of this report, there have been no material changes to the risk factors disclosed in our Form 10-K and our Quarterly Report on Form 10-Q filed with the SEC on May 16, 2022, except for the below risk factor. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.

There is substantial doubt about our ability to continue as a “going concern.”

As of June 30, 2022, we had $427,626 in cash and working capital of approximately $483,847. Further, we have incurred and expect to continue to incur significant costs in pursuit of our financing and acquisition plans. Our plans to raise capital and to consummate our initial business combination may not be successful. The Company has until May 9, 2023, to complete its initial Business Combination. The Company will mandatorily liquidate in the event it is unable to complete its initial Business Combination. These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements contained in this Quarterly Report do not include any adjustments that might result from the outcome of this uncertainty.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

26

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Item 6. Exhibits

The following exhibits are filed as part of this Quarterly Report on Form 10-Q.

No.		Description of Exhibits
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.

**	Furnished herewith.

27

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	7 ACQUISITION CORPORATION

	By:	/s/ *Joel Haney*
		Name:	Joel Haney
		Title:	Chief Financial Officer and Authorized Signatory

Dated: August 12, 2022

28

This ‘10-Q’ Filing	Date	Other Filings

	5/9/23
	12/31/22
Filed on:	8/12/22
For Period end:	6/30/22
	5/16/22	10-Q
	3/31/22	10-Q
	3/17/22	10-K
	1/1/22
	12/31/21	10-K
	11/9/21	8-K
	11/8/21	424B4
	11/4/21	3, 8-K, CERT, EFFECT, S-1/A
	10/19/21	S-1
	10/14/21
	6/30/21
	3/31/21
	3/26/21
	3/8/21
	3/4/21
	4/5/12
		List all Filings

7 Acquisition Corp. – ‘10-Q’ for 6/30/22

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