ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
References to the “Company,”
“our,” “us” or “we” refer to BYTE Acquisition Corp. The following discussion and analysis of the Company’s
financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related
thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain
information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special
Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form
10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on
our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks,
uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,”
“would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,”
“continue,” or the negative of such terms or other similar expressions. Such statements include, but are not limited to, possible
business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical
fact included in this Form 10-K. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described
in our other Securities and Exchange Commission (“SEC”) filings.
Overview
We are a blank check company
incorporated on January 8, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition,
share purchase, reorganization or similar business combination with one or more businesses or entities (the “Business Combination”),
that we have not yet identified. While we may pursue an initial business combination target in any business or industry, we intent to
focus our search for targets in the Israeli technology industry, including those engaged in cybersecurity, automotive technology, fintech,
enterprise software, cloud computing, semiconductors, medical technology, AI and robotics and that offer a differentiated technology platform
and products. Our sponsor is Byte Holdings LP, a Cayman Islands exempted limited partnership (our “Sponsor”).
Our registration statement
for our initial public offering was declared effective on March 17, 2021. On March 23, 2021, we consummated its Initial Public Offering
of 30,000,000 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 $300.0 million, and incurring offering costs of approximately
$17.2 million, inclusive of approximately $10.5 million in deferred underwriting commissions. On April 7, 2021, the underwriter exercised
the over-allotment option in part and purchased an additional 2,369,251 Units (the “Over-Allotment Units”), generating additional
gross proceeds of $23,692,510 (such offering, including the exercise of the over-allotment, the “Initial Public Offering”).
Simultaneously with the closing
of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 1,030,000 Units (the “Private
Placement Units”) at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $10.3 million.
Upon the closing of the Initial
Public Offering, sale of the Over-Allotment Units, and the Private Placement, $323.7 million ($10.00 per Unit) of the net proceeds of
the sale of the Units in the Initial Public Offering and certain of 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 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 us, until the earlier of: (i) the completion of a Business Combination and (ii) the
distribution of the Trust Account to the shareholders.
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If we are unable to complete
a Business Combination by the Extended Date, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but no more than 10 business days thereafter, redeem 100% of the outstanding 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 (less taxes payable and
up to $100,000 of interest to pay dissolution expenses), divided by the number of 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 the remaining shareholders
and our board of directors, dissolve and liquidate, subject in each case to its obligations under Cayman Islands law to provide for claims
of creditors and the requirements of other applicable law.
Results of Operations
Our entire activity since
inception through December 31, 2022 related to our formation, the preparation for the Initial Public Offering, and since the closing of
the Initial Public Offering, the search for a prospective initial Business Combination. We have neither engaged in any operations nor
generated any revenues to date. We will not generate any operating revenues until after completion of our initial Business Combination.
We will generate non-operating income in the form of interest income on cash and cash equivalents. We expect to incur increased 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 year ended December
31, 2022, we had net income of approximately $10.6 million, which primarily consisted of a noncash gain of approximately $7.5 million
resulting from changes in fair value of derivative warrant liabilities and income from investments held in the Trust Account of approximately
$4.5 million, partially offset by approximately $1.4 million of general and administrative expenses, including $120,000 of general and
administrative expenses to related parties.
For the period from January
8, 2021 (inception) through December 31, 2021, we had net income of approximately $5.0 million, which primarily consisted of a noncash
gain of approximately $6.9 million resulting from changes in fair value of derivative warrant liabilities and income from investments
held in the Trust Account of approximately $24,000, partially offset by approximately $845,000 of offering costs associated with derivative
warrant liabilities, and $1.0 million of general and administrative expenses, including $100,000 of general and administrative expenses
to related parties.
Liquidity and Going Concern
As of December 31, 2022, we
had cash of $1.1 million. Until the consummation of the Public Offering, our only source of liquidity was an initial purchase of ordinary
shares and private placement units by the Sponsor and loans from our Sponsor.
Our liquidity needs prior
to the consummation of the Initial Public Offering had been satisfied through a payment of $25,000 from the Sponsor to cover certain expenses
on our behalf in exchange for the issuance of the Founder Shares (as defined below), a loan under a note agreement from our Sponsor of
approximately $149,000 (the “Note”), and the net proceeds from the consummation of the Private Placement not held in the Trust
Account. We fully repaid the Note on March 25, 2021. In addition, in order to finance transaction costs in connection with a Business
Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors may, but are not obligated to, provide
us working capital loans. To date, there were no amounts outstanding under any working capital loans.
In connection with the Company’s
assessment of going concern considerations in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting
Standards Codification (“ASC”) Topic 205-40, “Presentation of Financial Statements - Going Concern,” management
has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s ability to
continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required
to liquidate after the Extended Date. The financial statements do not include any adjustment that might be necessary if the Company is
unable to continue as a going concern.
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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 Sagara Group, LLC
a monthly fee of $10,000 for office space, utilities and secretarial, and administrative and support services. We began incurring these
fees on March 23, 2021 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and
our liquidation.
The underwriters are entitled
to a deferred fee of $0.35 per Unit, or $11,329,238 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 we complete a 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 policy:
Derivative Warrant Liabilities
We do not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock
purchase warrants and forward purchase agreements, to determine if such instruments are derivatives or contain features that qualify as
embedded derivatives, pursuant to FASB ASC Topic 480 “Distinguishing Liabilities from Equity” (“ASC 480”) and
FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.
The warrants issued in connection
with the Initial Public Offering and the Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815.
Accordingly, we recognize the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting
period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized
in the Company’s statements of operations. The initial estimated fair value of the warrants was measured using a Monte Carlo simulation.
The subsequent estimated fair value of the Public Warrants is based on the listed price in an active market for such warrants while the
fair value of the Private Placement Warrants continues to be measured using a Monte Carlo simulation.
Class A ordinary shares subject to possible
redemption
We account for our Class A
ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory
redemption (if any) is classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares
(including Class ordinary shares that features 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, Class A ordinary shares are classified as shareholders’ equity. The Company’s Public 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,
as of December 31, 2022 and 2021, 32,369,251 Class A ordinary shares subject to possible redemption are presented at redemption value
as temporary equity, outside of the shareholders’ equity section of our balance sheet.
Effective with the closing
of the Public Offering (including sale of the Over-Allotment Units), we recognized the accretion from initial book value to redemption
amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.
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Net income per ordinary share
We have two classes of shares,
which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes
of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average of ordinary shares outstanding
for the respective period.
The calculation of diluted
net income per ordinary shares does not consider the effect of the warrants issued in connection with the Public Offering (including sale
of the Over-Allotment Units) and the Private Placement to purchase an aggregate of 16,699,626 ordinary shares in the calculation of diluted
income per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury
stock method. As a result, diluted net income per share is the same as basic net income per share for the year ended December 31, 2022
and for the period from January 8, 2021 (inception) through December 31, 2021. Accretion associated with the redeemable Class A ordinary
shares is excluded from net income per share as the redemption value approximates fair value.
Recent Accounting Standards
Management does not believe
that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial
statements.
Off-Balance Sheet Arrangements and Contractual
Obligations
As of December 31, 2022, we
did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or
contractual obligations.
JOBS Act
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 of the Sarbanes-Oxley Act, (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) disclose certain executive compensation related
items such as the correlation between executive compensation and performance and comparisons of the CEO’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.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK.
We are a smaller reporting
company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA.
This information appears following
Item 16 of this Report and is included herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Under the supervision and
with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation
of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year ended December 31, 2022, as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal
financial officer has concluded that during the period covered by this report, our disclosure controls and procedures were not effective
as of December 31, 2022, because of a material weakness in our internal control over financial reporting. A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Specifically,
the Company’s management has concluded that our control around the interpretation and accounting for certain complex financial instruments
was not effectively designed or maintained. This material weakness resulted in the restatement of the Company’s balance sheet as
of March 23, 2021 and its interim financial statements for the quarters ended March 31, 2021 and June 30, 2021. Additionally, this material
weakness could result in a misstatement of the warrant liability, Class A ordinary shares and related accounts and disclosures that would
result in a material misstatement of the financial statements that would not be prevented or detected on a timely basis.
Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal financial officer or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
We do not expect that our
disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how
well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures
are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the
benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no
evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and
instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions.
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Management’s Report on Internal Controls
Over Financial Reporting
As required by SEC rules and
regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with
GAAP. Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3)
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements.
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree or compliance with the policies or procedures may deteriorate. Our Chief Executive Officer assessed the
effectiveness of our internal control over financial reporting as of December 31, 2022. In making these assessments, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated
Framework (2013). Based on our assessments and those criteria, our Chief Executive Officer determined that our internal controls over
financial reporting were not effective as of December 31, 2022, because of material weaknesses in our internal control over financial
reporting. Specifically, our management has concluded that our control around the interpretation and accounting for certain complex financial
instruments was not effectively designed or maintained.
This Annual Report on Form
10-K does not include an attestation report of internal controls from our independent registered public accounting firm due to status
as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial
Reporting
There was no change in our
internal control over financial reporting that occurred during the fiscal year ended December 31, 2022 covered by this Annual Report on
Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting except
for the below:
Our principal executive officer
and principal financial officer performed additional accounting and financial analyses and other post-closing procedures including consulting
with subject matter experts related to the accounting for certain complex financial instruments. The Company’s management has expended,
and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control
over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements
and other literature for all significant or unusual transactions, we have expanded and will continue to improve these processes to ensure
that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards.
ITEM 9B. OTHER INFORMATION.
Non-Redemption Agreements
On March 8, 2023, the Company entered into Non-Redemption
Agreements with the Non-Redeeming Shareholders holding Class A Ordinary Shares of the Company. Pursuant to the Non-Redemption Agreements,
each of the Non-Redeeming Shareholders agreed to (a) not redeem 1,000,000 Shares in connection with the vote to amend the Company’s
Articles to extend the date by which the Company has to consummate an initial business combination from March 23, 2023 to September 25,
2023 and (b) vote their Shares in favor of the Extension presented by the Company for approval by its shareholders. In connection with
the foregoing, the Company agreed to pay to each Non-Redeeming Shareholder $0.033 per Share in cash per month through the Extended Date.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
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PART
III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE.
Directors and Executive Officers
Our directors and executive officers are as follows:
Name Age Position
Kobi Rozengarten 66 Executive Chairman Director
Samuel Gloor 36 Chief Executive Officer, Chief Financial Officer and Director
Vadim Komissarov 51 Director
Oded Melamed 55 Director
Louis Lebedin 65 Director
Kobi Rozengarten,
our Executive Chairman, has over 35 years of experience in investment and management positions in the multinational and Israeli technology
sector, with a focus on the fields of semiconductors, cloud computing, and enterprise software. Mr. Rozengarten has been the Chief Executive
Officer of Rozengarten Management Ltd. since December 2008. Mr. Rozengarten has experience as a sponsor of various SPACs since 2019. As
an entrepreneur, venture capitalist and board member, Mr. Rozengarten has led 12 start-ups with a total exit value of over $2.5 billion.
Mr. Rozengarten served from 2007 to 2019 as a General Partner and then as Managing Partner in Jerusalem Venture Partners, a leading Israeli
venture capital firm with $1.5 billion assets under management. In this capacity, Mr. Rozengarten led or co-led more than 25 deals and
was instrumental in leading many of Jerusalem Venture Partners’s exits including the sale of Altair Semiconductor to Sony, CyOptics,
Inc. to Avago, XtremIO to EMC and Dune Network to Broadcom Inc. From 1997 to 2007, Mr. Rozengarten served as a COO and President of Saifun
Semiconductors Ltd., a leading provider of IP solutions for the non-volatile (Flash) memory market, and was responsible for the formulation
and execution of the company’s business strategy and co-led its IPO on Nasdaq, raising $270 million at a valuation of $1 billion.
From 1987 to 1996, Mr. Rozengarten held multiple positions, as VP of Operation and VP of Business Development with K&S, a US based
leading supplier of equipment for the semiconductor industry, and was the Managing Director of Micro-Swiss, K&S’s subsidiary
in Israel. Mr. Rozengarten began his career in 1983 as a programmer and Financial Controller at Elbit Systems Ltd., an Israel-based international
defense electronics company. Mr. Rozengarten serves as a member of the Board of Governors of Technion. He holds B.Sc. and M.Sc. degrees
in Industrial and Management Engineering from Technion and participated in an Executive MBA program at Stanford University.
Samuel Gloor
has been our Chief Financial Officer since January 2021 and our Chief Executive Officer since November 2022. Mr. Gloor is an experienced
investment banker that has transacted in the TMT, consumer, healthcare, industrial, oil & gas and specialty finance verticals. Since
November 2020, Mr. Gloor has been the Founder and Managing Member of Sagara Group, LLC, where he specializes in strategic consulting and
business services for growth-stage companies, alternative asset managers and others. From October 2018 to August 2020, Mr. Gloor was a
member of the Financial Institutions Group at Nomura specializing in SPAC and Specialty Finance investment banking. From November 2014
to September 2018, Mr. Gloor was a member of the Advisory & Financing Group at Societe Generale Corporate & Investment Banking,
where he provided event-driven bridge and term lending and capital structure advisory services to blue-chip corporate clients and completed
several prominent financing transactions supporting M&A and corporate actions. Mr. Gloor received an M.Sc. in Accounting and Finance
from the London School of Economics and Political Science in London, United Kingdom and a BBA from the Norwegian Business School in Oslo,
Norway.
Vadim Komissarov,
one of our directors, is a seasoned investment and merchant banker with over 20 years of international experience in technology and telecommunications,
including advising companies in large investments in the high-tech telecom industry. Mr. Komissarov has been a Director and Chief Financial
Officer of Trident Acquisitions Corp since April 2016, the Chief Executive Officer of Trident Acquisitions Corp since November 2020, and
since May 2015, has been the Chief Executive Officer of VK Consulting. From April 2019 to November 2020, Mr. Komissarov was a Founder
and Director of Netfin, which merged and completed a $250 million business combination with Triterras in November 2020. From 2014 through
2015, Mr. Komissarov represented The UMW Holdings Berhad as an Investment Advisor. From 1999 to 2014, Mr. Komissarov held senior level
management positions with Russian investment banks such as Troika Dialog and Vnesheconombank. In his role as Executive Director of Globex
Capital and Chairman of Vnesheconombank Capital Americas, Mr. Komissarov was responsible for its worldwide corporate finance practice
from September 2009 to March 2014. Mr. Komissarov started his investment banking career in 1998 in New York working for international
banks, including Merrill and BNY Mellon, handling private equity transactions and alternative dispute resolution programs for Eastern
European clients. Mr. Komissarov holds an MBA degree from New York University’s Stern School of Business.
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Oded Melamed,
one of our directors, is an entrepreneur with over 30 years of experience in management positions in the Israeli high-tech sector. Mr.
Melamed is currently the Chief Executive Officer of Kiralis Technologies Ltd., a company enabling the development of safer drugs by providing
affordable and timely access to pure enantiomers. From 2005 to 2019, Mr. Melamed was the founder and Chief Executive Officer of Altair
Semiconductor, a leading semiconductor company in the cellular IoT space. The company was acquired by Sony in 2016 for $212 million. Prior
to founding Altair Semiconductor, Mr. Melamed was Director of Cable Modem Communications at Texas Instruments from 1999 to 2005. In this
role, he managed Altair Semiconductor after its acquisition by Texas Instruments, and played a key role in transitioning the business
into profitability. From 1997 to 1999, Mr. Melamed was product line manager at Libit Signal Processing Ltd., an Israeli fabless semiconductor
start-up company that developed CATV modems. Libit Signal Processing Ltd. was acquired by Texas Instruments in 1999 for $365 million.
From 1995 to 1997, Mr. Melamed was with Motorola Solutions, Inc., and was involved in the development and deployment of the first CDMA
cellular system in Israel. From 1989 to 1995, Mr. Melamed was an officer in the Israel Defense Force, Intelligence Corps. He holds B.Sc.
and M.Sc. degrees in Electrical Engineering, Cum Laude, from Tel-Aviv University, and an EMBA degree from Kellogg-Recanati International
Executive MBA program, Northwestern University/Tel-Aviv University.
Louis Lebedin,
one of our directors, has over 25 years of banking experience with a proven track record of building and leading a world class business.
From 2017 to 2019, Mr. Lebedin served as an advisor to Unio Capital LLC, an asset management firm, responsible for product development.
From 2006 to 2012, Mr. Lebedin was global head of JP Morgan’s prime brokerage business, a leading provider of clearing and financing
services for equity and fixed income hedge funds. He was responsible for defining and executing the strategy for the business, to expand
its market share while continuing to meet the evolving needs of its hedge fund clients. From 2008 to 2012, Mr. Lebedin served on JP Morgan
Clearing Corp.’s Operations Committee and the Equities Division’s Executive Committee. From 2001 to 2005, Mr. Lebedin was
the chief operating officer and chief financial officer of Bear Stearns’s Global Clearing Services division. Mr. Lebedin joined
the Clearance Division in 1988 assuming the role of controller before being promoted to chief financial officer in 1996. From 1980 to
1987, he worked at Coopers & Lybrand, rising to the level of audit manager specializing in financial services. Mr. Lebedin holds a
B.S. in accounting from Syracuse University, and he earned his CPA license in 1982.
Number and Terms of Office of Officers and
Directors
Our board of directors consists
of five members and is divided into three classes with only one class of directors being appointed in each year, and with each class (except
for those directors appointed prior to our first annual general meeting) serving a three-year term. In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following
our listing on Nasdaq. The term of office of the first class of directors, consisting of Mr. Lebedin, will expire at our first annual
meeting of shareholders. The term of office of the second class of directors, consisting of Messrs. Melamed and Gloor, will expire at
the second annual meeting of shareholders. The term of office of the third class of directors, consisting of Messrs. Komissarov and Rozengarten,
will expire at the third annual meeting of shareholders.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint officers as it deems appropriate pursuant to our Articles.
Director Independence
The rules of the Nasdaq require
that a majority of our board of directors be independent within one year of our IPO. An “independent director” is defined
generally as a person who, in the opinion of the company’s board of directors, has no material relationship with the listed company
(either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). Our board of directors
has determined that each of Messrs. Komissarov, Melamed and Lebedin are “independent directors” as defined in the Nasdaq listing
standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors
are present.
Board Committees
Audit Committee
We have established an audit
committee of the board of directors. Messrs. Komissarov, Melamed and Lebedin will serve as the members of the audit committee, and Mr.
Komissarov will chair the audit committee. All members of our audit committee are independent of and unaffiliated with our underwriters.
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Each member of the audit committee
is financially literate and our board of directors has determined that Mr. Komissarov qualifies as an “audit committee financial
expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee
charter, which details the principal functions of the audit committee, including:
Director Nominations
We do not have a standing
nominating committee though we intend to form a corporate governance and nominating committee as and when required to do so by law or
Nasdaq rules. In accordance with Rule 5605(e)(2) of the Nasdaq rules, a majority of the independent directors may recommend a director
nominee for selection by our board of directors. Our board of directors believes that the independent directors can satisfactorily carry
out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
The directors who will participate in the consideration and recommendation of director nominees are Messrs. Komissarov, Melamed and Lebedin.
In accordance with Rule 5605(e)(1)(A) of the Nasdaq rules, all such directors are independent. As there is no standing nominating
committee, we do not have a nominating committee charter in place.
The board of directors will
also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees
to stand for election at the next annual general meeting (or, if applicable, an extraordinary general meeting of shareholders). Our shareholders
that wish to nominate a director for election to our board of directors should follow the procedures set forth in our Articles.
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We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.
Compensation Committee
We have established a compensation
committee of the board of directors. Messrs. Komissarov and Melamed will serve as the members of the compensation committee, and Mr. Melamed
will chair the compensation committee. All members of our compensation committee are independent of and unaffiliated with our underwriters.
We have adopted a compensation
committee charter, which details the principal functions of the compensation committee, including:
● reviewing our executive compensation policies and plans;
Notwithstanding the foregoing,
as indicated above, other than the payment of customary fees we may elect to make to members of our board of directors for director service
and payment to an affiliate of our sponsor of $10,000 per month for office space, utilities and secretarial and administrative support
and reimbursement of expenses, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of
our existing shareholders, officers, directors or any of their respective affiliates, prior to, or for any services they render in order
to effectuate the consummation of an initial business combination. Accordingly, it is likely that prior to the consummation of an initial
business combination, the compensation committee will only be responsible for the review and recommendation of any compensation arrangements
to be entered into in connection with such initial business combination.
The charter also provides
that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal
counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.
However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation
committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Code of Ethics
We have adopted a code of
ethics applicable to our directors, officers and employees (“Code of Ethics”). A copy of the Code of Ethics will be provided
without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in
a Current Report on Form 8-K.
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Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Exchange
Act requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file
reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent shareholders are required by regulation
to furnish us with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to us, or
written representations that no Forms 5 were required, we believe that, during the fiscal year ended December 31, 2022, all Section 16(a)
filing requirements applicable to our officers and directors were complied with.
ITEM 11. EXECUTIVE COMPENSATION.
None of our officers or
directors have received any cash compensation for services rendered to us. Commencing on the date that our securities are first
listed on Nasdaq through the earlier of consummation of our initial business combination and our liquidation, we pay Sagara Group,
LLC $10,000 per month for office space, utilities, secretarial and administrative support services provided to members of our
management team. We may elect to make payment of customary fees to members of our board of directors for director service. In
addition, our sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket
expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due
diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made to our
sponsor, officers or directors, or our or their affiliates. Any such payments prior to an initial business combination will be made
from funds held outside the trust account. Other than quarterly audit committee review of such reimbursements, we do not expect to
have any additional controls in place governing our reimbursement payments to our directors and officers for their out-of-pocket
expenses incurred in connection with our activities on our behalf in connection with identifying and consummating an initial
business combination. Other than these payments and reimbursements, no compensation of any kind, including finder’s and
consulting fees, will be paid by the company to our sponsor, officers and directors, or any of their respective affiliates, prior to
completion of our initial business combination.
After the completion of our
initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to shareholders, to the extent then known, in the proxy solicitation
materials or tender offer materials furnished to our shareholders in connection with a proposed initial business combination. We have
not established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management.
It is unlikely the amount of such compensation will be known at the time of the proposed initial business combination, because the directors
of the post-combination business will be responsible for determining officer and director compensation.
Any compensation to be paid
to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination,
although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS.
We have no compensation plans
under which equity securities are authorized for issuance.
The following table sets forth
information regarding the beneficial ownership of our ordinary shares as of the date of this Annual Report, by:
● each of our officers and directors; and
● all of our officers and directors as a group.
The following table is based
on 41,491,564 ordinary shares outstanding as of February 16, 2023, of which 33,399,251 were Class A ordinary shares (including 32,369,251
public shares and 1,030,000 private placement shares) and 8,092,313 were Class B ordinary shares. Unless otherwise indicated, it is believed
that all persons named in the table below have sole voting and investment power with respect to all ordinary shares beneficially owned
by them.
Kobi Rozengarten — — — —
Samuel Gloor — — — —
Vadim Komissarov — — — —
Oded Melamed — — — —
Louis Lebedin — — — —
All officers and directors as a group (5 individuals) — — — —
Clal Insurance Enterprises Holdings Ltd.(4) 2,025,000 6.1 % — —
Glazer Capital, LLC and Paul J. Glazer(6) 1,855,494 5.6 % — —
Meteora Capital, LLC and Vik Mittal(8) 1,751,455 5.2 % — —
* Less than one percent
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Founder Shares
On January 22, 2021, our Sponsor
paid an aggregate of $25,000 to cover certain offering costs of the Company in consideration for 8,625,000 founder shares. The founder
shares included an aggregate of up to 1,125,000 shares subject to forfeiture by the Sponsor to the extent that the underwriters’
over-allotment was not exercised in full or in part, so that the number of founder shares would collectively represent 20% of our issued
and outstanding shares upon the completion of the Public Offering (excluding the private placement shares). On April 7, 2021, the underwriter
exercised its over-allotment option in part, and 532,687 founder shares were subsequently forfeited by the Sponsor. Prior thereto, the
company had no assets, tangible or intangible. Any conversion of Class B ordinary shares described herein will take effect as a redemption
of Class B ordinary shares and an issuance of Class A ordinary shares as a matter of Cayman Islands law.
The founder shares are identical
to the Class A ordinary shares included in the units sold in the IPO, except that:
● the founder shares are entitled to registration rights;
Private Placement Units
Simultaneously with the closing
of the IPO, pursuant to the Private Placement Units Purchase Agreement, the Company completed the private sale of an aggregate of 1,030,000
private placement units to our Sponsor at a purchase price of $10.00 per private placement unit, generating gross proceeds to the Company
of $10,300,000 (the “Private Placement”). The private placement units are identical to the Units sold in the IPO, except that
the private placement units, so long as they are held by our Sponsor or its permitted transferees, (i) are not redeemable by us, (ii)
may not (including the Class A ordinary shares issuable upon exercise of such private placement units and the Class A ordinary shares
issuable upon exercise of the private placement warrants underlying the private placement units), subject to certain limited exceptions,
be transferred, assigned or sold by such holders until 30 days after the completion of our initial business combination, (iii) may be
exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. No underwriting discounts or commissions
were paid with respect to such sales. The Private Placement was made pursuant to the exemption from registration contained in Section
4(a)(2) of the Securities Act of 1933, as amended.
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Related Party Loans
In order to finance transaction
costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors
may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). Such Working Capital Loans would
be evidenced by promissory notes. The notes may be repaid upon completion of a Business Combination, without interest, or, at the lender’s
discretion, up to $1,500,000 of the notes may be converted upon completion of a Business Combination into private placement-equivalent
units at a price of $10.00 per unit. Such units would be identical to the private placement units. In the event that a Business Combination
does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held
in the Trust Account would be used to repay the Working Capital Loans. As of December 31, 2022, the Company had no outstanding borrowings
under the Working Capital Loans.
On January 22, 2021, we issued
an unsecured promissory note (the “Promissory Note”) to the Sponsor, pursuant to which we could borrow up to an aggregate
principal amount of $251,000. The Promissory Note was non-interest bearing and payable on the earlier of (i) December 31, 2022 and (ii)
the completion of the IPO. As of December 31, 2022, there were no amounts outstanding under the Promissory Note.
Administrative Services Agreement
The Company agreed to pay the
Sponsor a total of $10,000 per month for office space, utilities, secretarial and administrative support services. On Novermber 30, 2022,
the sponsor assigned such agreement to Sagara Group, LLC. Upon completion of the Initial Business Combination or the Company’s liquidation,
the Company will cease paying these monthly fees.
Registration Rights
The holders of the founder
shares, private placement units (including the underlying securities) and securities that may be issued upon conversion of Working Capital
Loans have registration rights to require the Company to register a sale of any of the securities held by them pursuant to a registration
rights agreement. The holders of these securities are entitled to make up to three demands, excluding short form demands, that we 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. We will bear the expenses incurred in connection with the filing of any
such registration statements.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The firm of Marcum LLP, or
Marcum, acts as our independent registered public accounting firm. The following is a summary of fees paid to Marcum for services rendered.
Audit Fees. During
the year ended December 31, 2022 and the period from January 8, 2021 (inception) through December 31, 2021, fees for our independent registered
public accounting firm were approximately $72,000 and $101,000, respectively, for the services Marcum performed in connection with our
Initial Public Offering and the audit of our December 31, 2021 financial statements included in this Annual Report on Form 10-K.
Audit-Related Fees.
During the year ended December 31, 2022 and the period from January 8, 2021 (inception) through December 31, 2021, our independent registered
public accounting firm did not render assurance and related services related to the performance of the audit or review of financial statements.
Tax Fees. During the
year ended December 31, 2022 and the period from January 8, 2021 (inception) through December 31, 2021, fees for our independent registered
public accounting firm were approximately $3,000 and $0, respectively, for tax compliance, tax advice and tax planning.
All Other Fees. During
the year ended December 31, 2022 and the period from January 8, 2021 (inception) through December 31, 2021, there were no fees billed
for products and services provided by our independent registered public accounting firm other than those set forth above.
Pre-Approval Policy
Our audit committee was formed
upon the consummation of our Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although
any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our
audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit
services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit
services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
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PART
IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) The following documents are filed as part of this report:
(1) Financial Statements
Reference is made to the Index to Financial
Statements of the Company under Item 8 of Part II above.
(2) Financial Statement Schedule
All financial statement schedules are
omitted because they are not applicable or the amounts are immaterial, not required, or the required information is presented in the financial
statements and notes thereto in Item 8 of Part II above.
(3) Exhibits
We hereby file as part of this report
the exhibits listed in the attached Exhibit Index.
Exhibit Number Description
3.1* Amended and Restated Memorandum and Articles of Association.
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24.1 Power of Attorney (included on signature pages herein).
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
* Filed herewith.
ITEM 16. FORM 10-K SUMMARY.
None.
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INDEX TO FINANCIAL STATEMENTS