References to the "Company," "Consilium Acquisitions Corp. I," "our," "us" or
"we" refer to Consilium Acquisitions Corp. I. 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 within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934. 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 Risk Factors section of the
Company's final prospectus for its Initial Public Offering 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
Consilium Acquisition Corp. (the "Company") is a blank check company
incorporated in the Cayman Islands as an exempted company on April 13, 2021. The
Company was incorporated for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses that the Company has not yet identified
("Business Combination").
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.
As of September 30, 2022, the Company had not commenced any operations. All
activity for the three and nine months ended September 30, 2022 and for the
period from April 13, 2021 (inception) through December 31, 2021 relates to the
Company's formation, the proposed initial public offering ("Initial Public
Offering"), which is described below, and pursuit of a business combination. The
Company will not generate any operating revenues until after the completion of a
Business Combination, at the earliest. The Company will generate non-operating
income in the form of interest income from the proceeds derived from the Initial
Public Offering. The Company has selected December 31 as its fiscal year end.
On January 18, 2022, the Company consummated its Initial Public Offering of
18,975,000 units (the "Units"), including the issuance of 2,475,000 Units as a
result of the underwriter's exercise of its over-allotment option. Each Unit
consists of one Class A ordinary share of the Company, par value $0.0001 per
share (an "Ordinary Share"), one right to acquire one-tenth of an Ordinary
Share, and one-half of one redeemable warrant of the Company. Each whole warrant
entitles the holder thereof to purchase one Ordinary Share for $11.50 per share,
subject to adjustment. The Units were sold at a price of $10.00 per Unit,
generating gross proceeds to the Company of $189,750,000.
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Substantially concurrently with the closing of the Initial Public Offering, the
Company completed the private sale of 7,942,500 private placement warrants (the
"Private Placement Warrants") at a purchase price of $1.00 per Private Placement
Warrant, to the Company's sponsor, Consilium Acquisition Sponsor I, LLC (the
"Sponsor"), generating gross proceeds to the Company of $7,942,500. The Private
Placement Warrants are identical to the warrants sold as part of the Units in
the Initial Public Offering except that, so long as they are held by the Sponsor
or its permitted transferees: (1) they will not be redeemable by the Company
(except in certain redemption scenarios when the price per Ordinary Share equals
or exceeds $10.00 (as adjusted)); (2) they (including the Ordinary Shares
issuable upon exercise of these warrants) may not, subject to certain limited
exceptions, be transferred, assigned or sold by the Sponsor until 30 days after
the completion of the Company's initial business combination; (3) they may be
exercised by the holders on a cashless basis; and (4) they (including the
Ordinary Shares issuable upon exercise of these warrants) are entitled to
registration rights.
A total of $2,250,000 was deposited to the Company's operating account and a
total of $191,647,500, comprised of a portion of proceeds from the IPO and the
sale of the Private Placement Warrants, was placed in a U.S.-based trust account
at JP Morgan Chase Bank, N.A., maintained by Continental Stock Transfer & Trust
Company, acting as trustee. Except with respect to interest earned on the funds
held in the trust account that may be released to the Company to pay its taxes,
if any, the funds held in the trust account will not be released from the trust
account until the earliest to occur of: (1) the Company's completion of an
initial business combination; (2) 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 allow redemption in connection with its
initial business combination or to redeem 100% of the Company's public shares if
the Company does not complete its initial business combination within 18 months
(or 24 months if the sponsor exercises its extension options) from the closing
of the IPO or (B) with respect to any other provision relating to shareholders'
rights or pre-initial business combination activity; and (3) the redemption of
the Company's public shares if the Company has not completed its initial
business combination within 18 months (or 24 months if the sponsor exercises its
extension options) from the closing of the IPO, subject to applicable law.
Results of Operations
Our entire activity from inception through September 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 September 30, 2022, we had a net income of $818,936,
which consisted of $54,123 in legal and accounting expenses, $120,419 of
insurance expense, $3,777 of sponsor expenses, $12,218 dues and subscriptions
expense, and $3,977 of formation costs offset by a $1,013,450 earnings on
marketable securities held in the trust account. There was no activity for the
three months ended September 30, 2021.
For the nine months ended September 30, 2022, we had a net income of $519,213,
which consisted of $343,314 in legal and accounting expenses, $341,624 of
insurance expense, $24,462 of sponsor expenses, $133,706 dues and subscriptions
expense, $3,977 of formation costs, and $5 of bank fees, offset by $1,366,301
earnings on marketable securities held in the trust account.
Liquidity and Capital Resources
As of September 30, 2022 and December 31, 2021, the Company had $280,325 and $20
in cash, respectively, and working capital of (deficit) of $367,992 and
($866,674), respectively, excluding Marketing Securities held in the Trust
Account and the Deferred Underwriter Fee liability.
The Company's liquidity needs through September 30, 2022 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"), the Initial Public Offering and the sale of the private placement
warrants (see Note 3 and Note 4). Additionally, the Company drew on an unsecured
promissory note to pay certain offering costs.
The Company has incurred and expects to continue to incur significant costs in
pursuit of its financing and acquisition plans. These conditions raise
substantial doubt about the Company's ability to continue as a going concern for
a period within one year after the date that the financial statements are
issued. Management plans to address this uncertainty through related party loans
from the Sponsor, an affiliate of the Sponsor, or certain of the Company's
officers and directors or their affiliates ("Working Capital Loans") and
effecting a Business Combination. However, there is no assurance that the
Company's plans to raise capital or to consummate a Business Combination will be
successful or successful within the Combination Period. 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 this financial statement
is issued. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
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Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities as of September 30, 2022.
The underwriter of the IPO is entitled to a deferred discount of $0.35 per Unit,
or $6,641,250 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.
Commitments and Contingencies
Registration and Shareholder Rights
The holders of the Founder Shares, Private Placement Warrants, and 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) will be entitled to registration rights
pursuant to a registration rights agreement to be signed prior to or on the
effective date of the Proposed Public Offering, requiring the Company to
register such securities for resale. The holders will have the right to require
us to register for resale these securities pursuant to a shelf registration
under Rule 415 under the Securities Act. The holders of a majority of these
securities will also be entitled to make up to three demands, plus short form
registration demands, that we register such securities. In addition, the holders
will be entitled to certain "piggy-back" registration rights with respect to
registration statements filed subsequent to our completion of our initial
business combination. The Company will bear the expenses incurred in connection
with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a 45-day option from the date of the Initial
Public Offering to purchase up to 2,475,000 additional Units to cover
over-allotments, if any, at the Initial Public Offering price less the
underwriting discount. The underwriters exercised the over-allotment option in
full on January 18, 2022, the date of the Initial Public Offering. The
underwriter was entitled to a cash underwriting discount of $0.20 per Unit, or
$3,795,000 in the aggregate, which was paid upon the closing of the Initial
Public Offering. In addition, the underwriter is entitled to a deferred fee of
$0.35 per Unit, or $6,641,250 in the aggregate. 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.
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:
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Ordinary shares subject to
mandatory redemption (if any) are classified as a liability instrument and is
measured at fair value.
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Conditionally redeemable ordinary shares (including ordinary shares that feature
redemption rights that are either within the control of the holder or subject to
redemption upon the occurrence of uncertain events not solely within the
Company's control) are classified as temporary equity. At all other times,
ordinary shares are classified as shareholders' equity. The Company's ordinary
shares feature certain redemption rights that are considered to be outside of
the Company's control and subject to the occurrence of uncertain future events.
Accordingly, at September 30, 2022, 18,975,000 shares of Class A ordinary shares
subject to possible redemption is presented, at redemption value equal to the
amount held in the trust account, as temporary equity, outside of the
shareholders' deficit section of the Company's balance sheet.
Net Income (Loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC Topic
260, "Earnings Per Share". The statements of operations include a presentation
of income (loss) per Class A redeemable ordinary shares and income (loss) per
non-redeemable Class B ordinary shares following the two-class method of income
per common stock. In order to determine the net income (loss) attributable to
both the Class A redeemable ordinary shares and non-redeemable Class B ordinary
shares, the Company first considered the total income (loss) allocable to both
sets of stock. This is calculated using the total net income (loss) less any
dividends paid. For purposes of calculating net income (loss) per share, any
remeasurement of the Class A ordinary shares subject to possible redemption was
treated as dividends paid to the public shareholders.
Recent Accounting Pronouncements
Refer to Note 2 - Summary of Significant Accounting Policies in the Notes to
Condensed Financial Statements.
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