References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to SHUAA Partners Acquisition Corp I. References to our
"management" or our "management team" refer to our officers and directors, and
references to the "Sponsor" refer to SHUAA SPAC Sponsor I LLC, a Cayman Islands
limited liability company. 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 Quarterly 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" within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act that
are not historical facts, and involve risks and uncertainties that could cause
actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
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 Risk
Factors section of the Company's final prospectus for its Initial Public
Offering filed with 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 blank check company incorporated in the Cayman Islands on August 24,
2021 formed for the purpose of effecting a merger, amalgamation, share exchange,
asset acquisition, share purchase, reorganization or other similar Business
Combination with one or more businesses. We intend to effectuate our Business
Combination using cash derived from the proceeds of the Initial Public Offering
and the sale of the Private Placement Warrants, our shares, debt or a
combination of cash, shares and debt.
We expect to continue to incur significant costs in the pursuit of our
acquisition plans. We cannot assure you that our plans to complete a Business
Combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to
date. Our only activities from August 24, 2021 (inception) through March 4, 2022
were organizational activities, those necessary to prepare for the Initial
Public Offering, described below, and identifying a target company for a
Business Combination. We do not expect to generate any operating revenues until
after the completion of our Business Combination. We generate non-operating
income in the form of interest income on marketable securities held in the Trust
Account. We incur expenses as a result of being a public company (for legal,
financial reporting, accounting and auditing compliance), as well as for due
diligence expenses.
For the three months ended March 31, 2022, we had net loss of $604,695,
consisting of general and administrative costs of $612,268, offset by interest
on investment held in the Trust Account of $7,573.
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Liquidity and Capital Resources
On March 4, 2022, we have completed the Initial Public Offering of 10,000,000
Units, at $10.00 per Unit, generating gross proceeds of
$100,000,000. Subsequently, on March 7, 2022, the underwriters partially
exercised their option to purchase up to 1,500,000 additional Units, and on
March 8, 2022 the we consummated the issuance and sale of 865,000 Over-Allotment
Units, at $10.00 per Units, generating additional gross proceeds of $8,650,000.
Simultaneously with the closing of the Initial Public Offering, we completed the
sale of 7,265,000 Private Placement Warrants at a price of $1.00 per Private
Placement Warrant in private placements, of which (i) 6,765,000 Private
Placement Warrants were purchased by the Sponsor, (ii) 460,000 Private Placement
Warrants were purchased by BTIG and (iii) 40,000 Private Placement Warrants were
purchased by IBS, generating gross proceeds of $7,265,000. Subsequently, on
March 8, 2022, simultaneously with the issuance and sale of the Over-Allotment
Units, we consummated the sale of an additional 389,250 Private Placement
Warrants at a price of $1.00 per Private Placement Warrant, of which (i) 346,000
Private Placement Warrants were purchased by the Sponsor, (ii) 39,790 Private
Placement Warrants were purchased by BTIG and (iii) 3,460 Private Placement
Warrants were purchased by IBS, generating gross proceeds of $389,250.
Following the Initial Public Offering, the partial exercise of the
over-allotment option, and the sale of the Private Placement Warrants, a total
of $111,373,823 was placed in the Trust Account. We incurred $7,385,475 in
Initial Public Offering related costs, including $2,173,000 of underwriting
fees, $4,346,000 of deferred underwriting fees and $866,475 of other offering
costs.
For the three months ended March 31, 2022, net cash used in operating activities
was $1,247,967. The net loss of $604,695, consisted of operating costs paid by
related party under promissory note of $393, stock-based compensation of
$560,000, offset by interest earned on investments held in Trust Account of
$7,573 and changes in operating assets and liabilities used $1,196,092 of cash
from operating activities.
As of March 31, 2022, we had cash outside our Trust Account of $981,196 and had
working capital of $1,570,103. All remaining cash from the Initial Public
Offering is held in the Trust Account and is generally unavailable for use prior
to an initial Business Combination. In addition, in order to finance transaction
costs in connection with a Business Combination, our Sponsor or an affiliate of
the Sponsor or certain of our officers and directors may, but are not obligated
to, provide us Working Capital Loans. As of March 31, 2022, there were no
amounts outstanding under any Working Capital Loans.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet its needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination. However, if
our estimates of the costs of identifying a target business, undertaking
in-depth due diligence and negotiating a Business Combination are less than the
actual costs of such actions, we may have insufficient funds available to
operate its business prior to its initial Business Combination. Moreover, in
such event, we would need to raise additional capital through loans from its
Sponsor, officers, directors or third parties. None of the Sponsor, officers or
directors are under any obligation to advance funds to, or to invest in, us. If
we are 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 its business plan,
or reducing overhead expenses. We cannot provide any assurance that new
financing will be available to it on commercially acceptable terms, if at all.
Contractual obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to the Sponsor a
monthly fee of $10,000 for office space, utilities and secretarial and
administrative support. We began incurring these fees on March 1, 2022 and will
continue to incur these fees monthly until the earlier of the completion of the
Business Combination and our liquidation.
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The underwriters are entitled to a deferred fee of $0.40 per Unit, or $4,346,000
in the aggregate. The deferred fee will become payable to the underwriters 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
The preparation of condensed financial statements and related disclosures in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, 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 not identified any critical accounting policies other than
those described in Note 2 to condensed financial statements.
Recent Accounting Standards
Other than described in Note 2 to condensed financial statements, management
does not believe that any recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on our condensed
financial statements.
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