References to the "company," "our," "us" or "we" refer to Swiftmerge Acquisition Corp. 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.

Overview



We are a blank check company incorporated on February 3, 2021 as a Cayman
Islands exempted company and formed for the purpose of effectuating a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination with one or more businesses, which we refer to
throughout this Annual Report on Form
10-K
as our "initial business combination." We intend to effectuate our initial
business combination using cash from the proceeds of the initial public offering
and the private placement of the private placement warrants, the proceeds of the
sale of our shares in connection with our initial business combination (pursuant
to forward purchase agreements or backstop agreements we may enter into
following the consummation of the initial public offering or otherwise), shares
issued to the owners of the target, debt issued to bank or other lenders or the
owners of the target, or a combination of the foregoing.

                                       56

--------------------------------------------------------------------------------

Table of Contents

Our registration statement for our initial public offering ("initial public offering") was declared effective on December 14, 2021. On December 17, 2021, we consummated our initial public offering of 20,000,000 units (the "units" and, with respect to the Class A ordinary shares included in the units being offered, the "public shares") at $10.00 per unit, generating gross proceeds of approximately $200 million, and incurring offering costs of approximately $12.6 million, of which approximately $7 million was for deferred underwriting commissions. On January 18, 2022, the underwriter partially exercised its over-allotment option (the "over-allotment option"), resulting in 2,500,000 additional units being sold at $10.00 per unit, generating gross proceeds of approximately $25 million.

Simultaneously with the closing of the initial public offering, we consummated the private placement of 8,600,000 private placement warrants, at a price of $1.00 per private placement warrant with the sponsor and the anchor investors, generating gross proceeds of approximately $8.6 million. On January 18, 2022, following the underwriter's exercise of the over-allotment option, the sponsor purchased from the company an additional 750,000 private placement warrants at a price of $1.00 per private placement warrant.



Upon the closing of the initial public offering, the private placement and the
over-allotment option, approximately $227.2 million of the net proceeds of the
initial public offering and certain of the proceeds of the private placement
were placed in a trust account ("trust account") with Continental Stock
Transfer & Trust Company acting as trustee and invested in United States
"government securities" within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended, or the Investment Company Act, having a
maturity of 185 days or less or in money market funds meeting certain conditions
under Rule
2a-7
promulgated under the Investment Company Act which invest only in direct U.S.
government treasury obligations, as determined by the company, until the earlier
of: (i) the completion of a business combination and (ii) the distribution of
the trust account as described below.

If we are unable to complete an initial business combination within 18 months from the closing of our initial public offering, or June 17, 2023 (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 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 on the funds held in the trust account 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 the then-outstanding public shares, which redemption will completely extinguish public shareholders' rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law

Results of Operations



We have neither engaged in any operations nor generated any operating revenues
to date. Our only activities for the period from February 3, 2021 (inception)
through December 31, 2021 were organizational activities, those necessary to
prepare for the initial public offering, as described below, and since the
closing of the initial public offering, the search for a prospective initial
business combination. We will not be generating any operating revenues until the
closing and completion of our initial business combination, at the earliest. We
generate
non-operating
income in the form of interest income on cash and cash equivalents held after
the initial public offering. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as
well as due diligence expenses.

For the period from February 3, 2021 (inception) through December 31, 2021, we had a net loss of $482,997, which resulted from formation and operating costs of $139,479, loss on sale of private placement warrants of $343,999, offset in part by unrealized gain on investments held in trust account in the amount of $311 and realized gain on investments held in trust account of $170.


                                       57

--------------------------------------------------------------------------------

Table of Contents

Liquidity and Capital Resources

As of December 31, 2021, we had approximately $875,831 in our operating bank account and a working capital surplus of $1,515,463.

Our liquidity needs up to December 31, 2021 had been satisfied through a payment of $25,000 from the sponsor to cover certain expenses on behalf of the company in exchange for the issuance of the founder shares, a loan under a promissory note from our sponsor of approximately $149,172 (the "promissory note"), and the net proceeds from the consummation of the private placement not held in the trust account. The promissory note was repaid in full on December 21, 2021. In addition, in order to finance transaction costs in connection with an initial business combination, our officers, directors and initial shareholders may, but are not obligated to, provide the company with working capital loans. To date, there are no amounts outstanding under any working capital loans.


For the period from February 3, 2021 (inception) through December 31, 2021, net
cash used in operating activities was $1,099,296, which was due to our net loss
of $482,997, realized gain on investments held in the trust account of $170,
unrealized gain on investments held in the trust account of $311 and changes in
working capital of $959,817, offset in part by a
non-cash
loss on the sale of private placement warrants of $343,999.

For the period from February 3, 2021 (inception) through December 31, 2021, net cash used in investing activities of $202,000,000 was the result of the amount of net proceeds from the closing of our initial public offering being deposited to the trust account.

For the period from February 3, 2021 (inception) through December 31, 2021, net cash provided by financing activities of $203,975,127 was comprised of $25,000 in proceeds from the issuance of Class B ordinary shares to sponsor, $6,750 in proceeds from the issuance of Class B ordinary shares to anchor investors, $196,000,000 in proceeds from the initial public offering net of underwriting discount paid and $8,600,000 in proceeds from the sale of private placement warrants, partially offset by the payment of $656,623 for offering costs associated with the initial public offering.

Following our initial public offering, the closing of the over-allotment option and the sale of the private placement warrants, a total of $227.2 million was placed in the trust account. We incurred $14.05 million in transaction costs, including $4.5 million of underwriting fees, $7.8 million of deferred underwriting fees and $1.6 million of other offering costs. The promissory note from our sponsor was paid in full on December 21, 2021. Subsequent to the consummation of our initial public offering, the closing of the over-allotment option and the sale of the private placement warrants, our liquidity needs have been satisfied through the proceeds from the consummation of the private placement not held in the trust account.

As of December 31, 2021 we had cash of $875,831 held outside the trust account. 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 a business combination.

In order to finance transaction costs in connection with an intended initial business combination, the sponsor or an affiliate of the sponsor or certain of the company's officers and directors may, but are not obligated to, loan the company funds as may be required. If the company completes an initial business combination, the company may repay such loaned amounts out of the proceeds of the trust account released to the company. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that we do not consummate an initial business combination, the company may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from the trust account would be used to repay such loaned amounts. Up to $1,500,000 of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants. To date, there were no amounts outstanding under any of these loans.

As of December 31, 2021, the company had $875,831 in cash held outside of the trust account and a working capital surplus of $1,515,463. Prior to the completion of the initial public offering, substantial doubt about the Company's ability to continue as a going concern existed as the company lacked the liquidity it needed to sustain operations for a reasonable period of time, which is considered to be one year from the


                                       58

--------------------------------------------------------------------------------

Table of Contents

issuance date of the financial statements. The company has since completed its initial public offering 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. Accordingly, management has since reevaluated the company's liquidity and financial condition and determined that sufficient capital exists to sustain operations one year from the date these financial statements are issued and therefore substantial doubt has been alleviated.



Off-Balance
Sheet Arrangements

We did not have any
off-balance
sheet arrangements as of December 31, 2021.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our sponsor a monthly fee of up to $10,000 (as of December 31, 2021) for office space and administrative support to the company. Following the entrance into the services agreement amendment, the company will reimburse the sponsor an amount up to $1,000 per month for such services. We began incurring these fees on December 17, 2021 and will continue to incur these fees monthly until the earlier of the completion of the business combination and the company's liquidation.

Registration and Shareholder Rights Agreement

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 issued upon conversion of the working capital loans) have registration and shareholder rights to require the company to register a sale of any of its securities held by them pursuant to a registration and shareholder rights agreement entered into on the date of the initial public offering. The holders of these securities are entitled to make up to 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 an initial business combination. The company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

We granted the underwriters a 45-day option from the date of initial public offering to purchase up to 3,000,000 additional units to cover over-allotments, if any, at the initial public offering price less the underwriting discounts and commissions. The underwriters partially exercised the over-allotment option on January 18, 2022, purchasing an additional 2,500,000 units

The underwriter is entitled to a deferred fee of $0.35 per unit, or $7,875,000 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 an initial business combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies

The preparation of 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 identified the following critical accounting policies:

Warrant Classification



The company accounts for the warrants issued in connection with the initial
public offering and the private placement in accordance with the guidance
contained in ASC
815-40
under which the warrants meet the criteria for equity treatment and are recorded
as equity.

Ordinary Shares Subject to Possible Redemption



All of the 22,500,000 Class A ordinary shares sold as part of the units in the
initial public offering (and including the units sold in connection with the
underwriters' partial exercise of the over-allotment option) contain a
redemption feature which allows for the redemption of such public shares in
connection with the company's liquidation, if there is a shareholder vote or
tender offer in connection with the initial business combination and in
connection with certain amendments to the amended and restated memorandum and
articles of association. In accordance with ASC
480-10-S99,
redemption provisions not solely within the control of the company require
ordinary shares subject to redemption to be classified outside of permanent
equity. Therefore, all Class A ordinary shares have been classified outside of
permanent equity.

                                       59

--------------------------------------------------------------------------------

Table of Contents


The company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of redeemable ordinary shares to equal the redemption
value at the end of each reporting period. Increases or decreases in the
carrying amount of redeemable ordinary shares are affected by charges against
additional
paid-in
capital and accumulated deficit.

Net Loss Per Ordinary Share

Net loss per ordinary share is computed by dividing net income (loss) by the weighted-average number of ordinary shares outstanding during the period. The company has not considered the effect of the warrants sold in the initial public offering as part of the units and the 9,350,000 private placement warrants in the calculation of diluted loss per share, because the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

Recent Accounting Standards



In August 2020, the FASB issued Accounting Standards Update ("ASU")
2020-06,
Debt
-
Debt with Conversion and Other Options
(
Subtopic
470-0)
and
Derivatives and Hedging
-
Contracts in Entity
'
s Own Equity
(
Subtopic
815-40)
("ASU
2020-06")
to simplify accounting for certain financial instruments. ASU
2020-06
eliminates the current models that require separation of beneficial conversion
and cash conversion features from convertible instruments and simplifies the
derivative scope exception guidance pertaining to equity classification of
contracts in an entity's own equity. The new standard also introduces additional
disclosures for convertible debt and freestanding instruments that are indexed
to and settled in an entity's own equity. ASU
2020-06
amends the diluted earnings per share guidance, including the requirement to use
the
if-converted
method for all convertible instruments. ASU
2020-06
is effective for the company on January 1, 2024 and should be applied on a full
or modified retrospective basis, with early adoption permitted beginning on
January 1, 2021. The company adopted ASU
2020-06
effective February 3, 2021 using the full retrospective method of transition.
The adoption of ASU
2020-06
did not have a material impact on the financial statements for the fiscal year
ended December 31, 2021.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the company's financial statements.

JOBS Act



On April 5, 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" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing 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.

Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an "emerging growth company," we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB 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)


                                       60

--------------------------------------------------------------------------------

Table of Contents

disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our initial public offering or until we are no longer an "emerging growth company," whichever is earlier.

© Edgar Online, source Glimpses