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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM
10-Q
 
 
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
   
to
   
 
 
KENSINGTON CAPITAL ACQUISITION CORP. V
(Exact Name of Registrant as Specified in its Charter)
 
 
 
Cayman Islands
  
001-40741
  
98-1592043
(State or other jurisdiction
  
(Commission
  
(l.R.S. Employer
of incorporation)
  
File Number)
  
Identification No.)
 
1400 Old Country Road, Suite 301
  
11590
Westbury, New York
  
(Zip Code)
(Address of Principal Executive Offices)
  
Registrant’s telephone number, including area code: (703)
674-6514
Not Applicable
(Former name or former address, if changed since last report)
 
 
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
 
Title of each class
  
Trading
Symbol(s)
  
Name of each exchange on which registered
Units, each consisting of one Class A ordinary share, $0.0001 par value, and three-fourths of one redeemable warrant
  
KCGI.U
  
The New York Stock Exchange
Class A ordinary shares
  
KCGI
  
The New York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50
  
KCGI WS
  
The New York Stock Exchange
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
 
Large accelerated filer   ☐    Accelerated filer   ☐
Non-accelerated filer
   ☒    Smaller reporting company   ☒
     Emerging growth company   ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes ☒ No ☐
As of Ma
y 1
7
, 2
024, 4,542,733 Class A ordinary shares, par value $0.0001 per share, and 6,900,000 Class B ordinary shares, par value $0.0001 per share, were issued and outstanding, respectively.
 
 
 
KENSINGTON CAPITAL ACQUISITION CORP. V
Quarterly Report on Form
10-Q
Table of Contents
 
         
Page
No.
  
  
Item 1.
    Unaudited Condensed Financial Statements      1  
   Condensed Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023      1  
   Unaudited Condensed Statements of Operations for the three months ended March 31, 2024 and 2023      2  
   Unaudited Condensed Statements of Changes in Shareholders’ Deficit for the three months ended March 31, 2024 and 2023      3  
   Unaudited Condensed Statements of Cash Flows for the three months ended March 31, 2024 and 2023      4  
   Notes to Unaudited Condensed Financial Statements      5  
Item 2.
    Management’s Discussion and Analysis of Financial Condition and Results of Operations      21  
Item 3.
    Quantitative and Qualitative Disclosures About Market Risk      26  
Item 4.
    Controls and Procedures      27  
  
Item 1.
    Legal Proceedings      28  
Item 1A.
    Risk Factors      28  
Item 2.
    Unregistered Sales of Equity Securities and Use of Proceeds      28  
Item 3.
    Defaults Upon Senior Securities      28  
Item 4.
    Mine Safety Disclosures      28  
Item 5.
    Other Information      28  
Item 6.
    Exhibits      29  
 
i
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Financial Statements
KENSINGTON CAPITAL ACQUISITION CORP. V
CONDENSED BALANCE SHEETS
 
    
March 31, 2024
    
December 31, 2023
  
    
(Unaudited)
        
Assets
     
Current assets:
     
Cash
    $ 1,120,360     $ 1,222,918  
Prepaid expenses
      77,248       127,183  
  
 
 
    
 
 
  
Total current assets
      1,197,608       1,350,101  
Investments held in Trust Account
      50,083,616       49,216,721  
  
 
 
    
 
 
  
Total Assets
   
$
51,281,224
 
  
$
50,566,822
 
  
 
 
    
 
 
  
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit
     
Current liabilities:
     
Accounts payable
    $ 197,311     $ 132,705  
Accrued expenses
      2,209,888       2,140,748  
Working Capital Loan -current related party
      1,100,250       1,100,250  
  
 
 
    
 
 
  
Total current liabilities
      3,507,449       3,373,703  
Deferred underwriting commissions in connection with the initial public offering
      9,660,000       9,660,000  
Derivative warrant liabilities
      2,365,200       3,942,000  
  
 
 
    
 
 
  
Total Liabilities
      15,532,649       16,975,703  
Commitments and Contingencies (Note 5)
     
Class A ordinary shares subject to possible redemption, 4,542,733 shares at redemption value of approximately $11.00 and $10.81 per share as of March 31, 2024 and December 31, 2023, respectively
      49,983,616       49,116,721  
Shareholders’ Deficit
     
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of March 31, 2024 and December 31, 2023
      —        —   
Class A ordinary shares, $0.0001 par value; 100,000,000 shares authorized; no
non-redeemable
shares issued or outstanding as of March 31, 2024 and December 31, 2023
      —        —   
Class B ordinary shares, $0.0001 par value; 10,000,000 shares authorized; 6,900,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023
      690       690  
Additional
paid-in
capital
      —        —   
Accumulated deficit
      (14,235,731 )      (15,526,292 ) 
  
 
 
    
 
 
  
Total shareholders’ deficit
      (14,235,041 )      (15,525,602 ) 
  
 
 
    
 
 
  
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit
   
$
51,281,224
 
  
$
50,566,822
 
  
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
1
KENSINGTON CAPITAL ACQUISITION CORP. V
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
 
    
For The Three Months Ended
March 31,
  
    
2024
    
2023
  
General and administrative expenses
    $ 226,239     $ 1,022,665  
Administrative expense
s
- related party
      60,000       20,000  
  
 
 
    
 
 
  
Loss from operations
      (286,239 )      (1,042,665 ) 
Other income (expenses):
     
Change in fair value of derivative warrant liabilities
      1,576,800       (3,227,200 ) 
Income from investments held in Trust Account
      866,895       2,732,154  
  
 
 
    
 
 
  
Total other income (expenses)
      2,443,695       (495,046 ) 
  
 
 
    
 
 
  
Net income (loss)
   
$
2,157,456
 
  
$
(1,537,711
) 
  
 
 
    
 
 
  
Weighted average shares outstanding of Class A ordinary share, basic and diluted
      4,542,733       27,600,000  
  
 
 
    
 
 
  
Basic and diluted net income (loss) per share, Class A ordinary share
    $ 0.19     $ (0.04 ) 
  
 
 
    
 
 
  
Weighted average shares outstanding of Class B ordinary share, basic and diluted
      6,900,000       6,900,000  
  
 
 
    
 
 
  
Basic and diluted net income (loss) per share, Class B ordinary share
    $ 0.19     $ (0.04 ) 
  
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
2
KENSINGTON CAPITAL ACQUISITION CORP. V
UNAUDITED CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
For The Three Months Ended March 31, 2024
 
    
Class A Ordinary
Shares
     
Class B Ordinary
Shares
     
Additional
Paid-in

Capital
     
Accumulated
Deficit
    
Total
Shareholders’
Deficit
  
    
Shares
     
Amount
     
Shares
     
Amount
  
Balance - December 31, 2023
   
 
— 
 
   
$
— 
 
   
 
6,900,000
 
   
$
690
 
   
$
— 
 
   
$
(15,526,292
) 
  
$
(15,525,602
) 
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      —         —         —         —         —         (866,895 )     (866,895 )
Net income
      —         —         —         —         —         2,157,456       2,157,456  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
Balance - March 31, 2024 (unaudited)
   
 
— 
 
   
$
— 
 
   
 
6,900,000
 
   
$
690
 
   
$
— 
 
   
$
(14,235,731
) 
  
$
(14,235,041
) 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
  
For The Three Months Ended March 31, 2023
 
    
Class A Ordinary
Shares
     
Class B Ordinary
Shares
     
Additional
Paid-in

Capital
    
Accumulated
Deficit
    
Total
Shareholders’
Deficit
  
    
Shares
     
Amount
     
Shares
     
Amount
     
 
    
 
    
 
  
Balance - December 31, 2022
      
$
 
 
   
 
6,900,000
 
   
$
690
 
   
$
— 
 
  
$
(15,084,280
) 
  
$
(15,083,590
) 
Excess of cash received over fair value of Additional Private Placement Warrants
      —         —         —         —         2,208,000       —        2,208,000  
Remeasurement of redemption value of Class A ordinary shares subject to possible
redemption
      —         —         —         —         (2,208,000 )      (3,284,154 )      (5,492,154 ) 
Net loss
      —         —         —         —         —       (1,537,711 )      (1,537,711 ) 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
Balance - March 31, 2023 (unaudited)
   
 
— 
 
   
$
— 
 
   
 
6,900,000
 
   
$
690
 
   
$
— 
 
  
$
(19,906,145
) 
  
$
(19,905,455
) 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
  
The accompanying notes are an integral part of these unaudited condensed financial statements
 
3
KENSINGTON CAPITAL ACQUISITION CORP. V
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 
    
For The Three Months Ended
March 31,
  
  
2024
    
2023
  
Cash Flows from Operating Activities:
     
Net income (loss)
    $ 2,157,456     $ (1,537,711 ) 
Adjustments to reconcile net income (loss) to net cash used in operating activities:
     
Change in fair value of derivative warrant liabilities
      (1,576,800 )      3,227,200  
Income from investments held in Trust
Account
      (866,895 )     (2,732,154 ) 
Changes in operating assets and liabilities:
     
Prepaid expenses
      49,935       10,556  
Accounts payable
      64,606       46,037  
Accrued expenses
      69,140       845,716  
  
 
 
    
 
 
  
Net cash used in operating activities
      (102,558 )      (140,356 ) 
  
 
 
    
 
 
  
Cash Flows from Investing Activities:
     
Cash deposited in Trust Account
      —        (2,760,000 ) 
  
 
 
    
 
 
  
Net cash used in investing activities
      —        (2,760,000 ) 
  
 
 
    
 
 
  
Cash Flows from Financing Activities:
     
Proceeds received from private placement
      —        2,760,000  
  
 
 
    
 
 
  
Net cash provided by financing activities
      —        2,760,000  
  
 
 
    
 
 
  
Net change in cash
      (102,558 )      (140,356 ) 
Cash - beginning of the period
      1,222,918       1,235,676  
  
 
 
    
 
 
  
Cash - end of the period
   
$
1,120,360
 
  
$
1,095,320
 
  
 
 
    
 
 
  
Supplemental disclosure of
non-cash
activities:
     
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
    $ 866,895     $ 2,732,154  
The accompanying notes are an integral part of these unaudited condensed financial statements.
 
4
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Kensington Capital Acquisition Corp. V (the “Company” or “Kensington”) was incorporated on March 19, 2021 as a Cayman Islands exempted company. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of March 31, 2024, the Company had not commenced any operations. All activity for the period from March 19, 2021 (inception) through March 31, 2024 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and since the Initial Public Offering, its search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates
non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering.
The Company’s sponsor is Kensington Capital Sponsor V LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on August 12, 2021. On August 17, 2021, the Company consummated its Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), which includes the exercise in full of the underwriters’ option to purchase 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.7 million, of which approximately $9.7 million and approximately $889,000 was for deferred underwriting commissions (see Note 5) and offering costs allocated to derivate warrant liabilities, respectively.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the “Initial Private Placement” and together with the Additional Private Placement (as defined below), the “Private Placements”) of 11,360,000 warrants (each, a “Private Placement Warrant” and collectively with the Additional Private Placement Warrants (as defined below), the “Private Placement Warrants”) at a price of $0.75 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $8.5 million (see Note 4).
Upon closing of the Initial Public Offering and the Initial Private Placement , $276.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and of the Private Placement Warrants in the Initial Private Placement were placed in a trust account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule
2a-7
under the Investment Company Act, which invest only in direct U.S. government treasury obligations, 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.
On each of August 4, 2022 and February 15, 2023, in connection with the Extensions as described below, the Company consummated an additional private placement (each, an “Additional Private Placement” and collectively, the “Additional Private Placements”) of 3,680,000 warrants (each, an “Additional Private Placement Warrant” and collectively, the “Additional Private Placement Warrants”) at a price of $0.75 per Additional Private Placement Warrant, generating total proceeds in aggregate of $5,520,000. The Additional Private Placement Warrants were purchased by the Sponsor and are substantially similar to the Private Placement Warrants issued to the Sponsor at the time of the Company’s Initial Public Offering. The Additional Private Placement Warrants were issued pursuant to, and are governed by, the Warrant Agreement that the Company entered into at the time of the Initial Public Offering. Upon closing of the Additional Private Placements, the proceeds received by the Company in connection with the issuance of the Additional Private Placement Warrants were deposited in the Trust Account.
On August 11, 2023 and August 14, 2023, the Sponsor and the Company entered into agreements (the
“Non-Redemption
Agreements”) with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 2,600,000 Class A ordinary shares (the
“Non-Redeemed
Shares”) of the Company at the extraordinary general meeting called by the Company (the “Extraordinary General Meeting”) to approve, among other proposals,
 
5
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
an extension of time for the Company to consummate an initial business combination from August 17, 2023 to August 17, 2024 (the “Extension”). In exchange for the foregoing commitment not to redeem such shares, the Sponsor has agreed to transfer to such investors an aggregate of 568,750 Class B ordinary shares of the Company held by the Sponsor immediately following the consummation of an initial business combination if they continued to hold such
Non-Redeemed
Shares through the Extraordinary General Meeting. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023 and the investors subject to the
Non-Redemption
Agreements did not redeem their shares. The Company estimated the aggregate fair value of the Sponsor shares attributable to the
Non-Redemption
Agreements to be $0.6 million or $0.97 per share. In connection with the Extraordinary General Meeting, holders of 23,057,267 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.67 per share, for an aggregate redemption amount of approximately $246.0 million.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete an initial Business Combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.
The Company will provide holders of the Company’s outstanding Class A ordinary shares, par value $0.0001 per share, sold in the Initial Public Offering (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, net of taxes payable, calculated as of two business days prior to the initial Business Combination. The
per-share
amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares were recorded at a redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a shareholder vote is not required by applicable law or stock exchange rule and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its amended and restated memorandum and articles of association (the “Memorandum and Articles”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by applicable law or stock exchange rule, or the Company decides to obtain shareholder approval for business or reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) agreed to vote any Founder Shares (as defined below in Note 4) and any Public Shares held by them in favor of a Business Combination.
The Memorandum and Articles provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor and the Company’s officers and directors (the “initial shareholders”) agreed, pursuant to a letter
 
6
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
agreement with the Company, that they will not propose any amendment to the Memorandum and Articles (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination by August 17, 2024 (the “Combination Period”) or (B) with respect to any other provision relating to shareholders’ rights or
pre-initial
Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding Public Shares.
The Company initially had 12 months from the closing of the Initial Public Offering to consummate the initial Business Combination. However, if the Company anticipated that it may not be able to consummate the initial Business Combination within 12 months, the Company was permitted to, by resolution of its board of directors at the option of the Sponsor, extend the period of time the Company had to consummate an initial Business Combination up to two times, each by an additional 6 months (for a total of up to an additional 12 months from the closing of the Initial Public Offering), subject to the Sponsor purchasing additional Private Placement Warrants. The Company’s shareholders were not entitled to vote on or redeem their shares in connection with any such extension. Pursuant to the terms of the Memorandum and Articles, in order to extend the period of time to consummate an initial Business Combination in such a manner, the Sponsor had to purchase an additional 3,680,000 Private Placement Warrants, at a price of $0.75 per warrant, and deposit $0.10 per each Unit (for an aggregate of approximately $2.8 million), in proceeds into the Trust Account on or prior to the date of the applicable deadline, for
each 6-month extension.
On August 4, 2022 and February 15, 2023, the Company elected to extend the Combination Period by 6 months each time to August 17, 2023 (the “Extensions”). On July 28, 2023, the Company filed a definitive proxy statement for the solicitation of proxies in connection with the Extraordinary General Meeting of the Company’s shareholders held on August 15, 2023 to consider and vote on, among other proposals, an amendment to the Company’s Memorandum and Articles to extend the date by which the Company must consummate a business combination from August 17, 2023 to August 17, 2024. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023.
The initial shareholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only, or less than, $10.00. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
 
7
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging
growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Risks and Uncertainties
The continuing military conflict between the Russian Federation and Ukraine, the military action between Hamas and Israel, and the risk of escalations of other military conflicts have created and are expected to create global economic consequences. The impact of these actions and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Liquidity and Going Concern
As of March 31, 2024, the Company had approximately $1.1 million in its operating bank account and a working capital deficit of approximately $2.3 million.
The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to cover for certain expenses on behalf of the Company in exchange for issuance of Founder Shares (as defined in Note 4), and the loan from the Sponsor of approximately $150,000 under the Note (as defined in Note 4), which was converted into a Working Capital Loan (as defined in Note 4) on August 17, 2021. Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity needs have been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Initial Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a 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, provide the Company Working Capital Loans (see Note 4). As of March 31, 2024 and December 31, 2023, the fair value of the Working Capital Loan was $150,000 (see Note 4).
On August 29, 2023, the Sponsor loaned the Company an aggregate of up to $950,250 to cover expenses related to the Company’s initial business combination pursuant to a promissory note (the “Second Note”). The Second Note is noninterest bearing and payable on the earliest of: (i) the consummation of the Company’s initial business combination unless converted into working capital warrants at the option of the Sponsor, at a price of $0.75 per warrant, as described in the registration statement that the Company filed in connection with the initial public offering of its securities, (ii) August 17, 2024, and (iii) the liquidation of the Company. Such working capital warrants would be identical to the private placement warrants issued to the Sponsor in a private placement in connection with the Company’s initial public offering. As of March 31, 2024 and December 31, 2023, the fair value of the Second Note was $950,250 (see Note 4).
 
8
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Based upon the analysis above, management has determined that the Company does not have sufficient liquidity to meet its anticipated obligations for at least twelve months after the financial statements are issued, as such, the events and circumstances raise substantial doubt about the Company’s ability to continue as a going concern. In connection with our assessment of going concern considerations in accordance with the ASC
205-40,
the Company has until August 17, 2024 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern.
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 8 of Regulation
S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K
(the “Form
10-K”)
for the year ended December 31, 2023, as filed with the SEC on March 29, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2023, is derived from the audited financial statements presented in the Form
10-K.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of income and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2024 and December 31, 2023.
Investments Held in Trust Account
The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income on investments held in the Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
 
9
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of March 31, 2024 and December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the unaudited condensed balance sheets.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC
815-15.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
The 20,700,000 warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the 18,720,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC
815-40.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed statements of operations. The fair value of the Public Warrants issued in connection with the Public Offering were initially estimated using a Monte Carlo simulation model. For periods where no observable traded price is available, the fair value continues to be estimated using a Monte Carlo simulation. The fair value of the Private Placement Warrants is determined using
 
10
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Black-Scholes option pricing model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Working Capital Loans-Related Party
The Company has elected the fair value option to account for its Working Capital Loans with its Sponsor as defined and more fully described in Note 4. As a result of applying the fair value option, the Company records the loans fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recorded as change in the fair value of Working Capital Loans reported in the condensed statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s and, if applicable, an independent third-party valuation firm’s own assumption about the assumptions a market participant would use in pricing the asset or liability.
Offering Costs Associated with Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as
non-operating
expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A 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, 4,542,733 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets as of March 31, 2024 and December 31, 2023.
Effective with the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which resulted in charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has 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 (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment) and the Private Placement Warrants to purchase an aggregate of 39,420,000 Class A ordinary shares, or the effects of the 1,467,000 shares underlying the warrants that would be issuable upon conversion of the Working Capital Loans (as defined in Note 4) in the calculation
 
11
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. The Company has considered the effect of Class B ordinary shares that were excluded from the weighted average number of basic shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares. Remeasurement of the redeemable Class A ordinary shares is excluded from net income per share as the
redemption
value approximates fair value.
The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
 
    
For the
Three Months Ended
March 31, 2024
     
For the
Three Months Ended
March 31, 2023
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and Diluted net income (loss) per ordinary share:
            
Numerator:
            
Allocation of net income (loss)
    $ 856,504      $ 1,300,952      $ (1,230,169 )     $ (307,542 ) 
Denominator:
            
Basic and Diluted weighted average ordinary shares outstanding
      4,542,733        6,900,000        27,600,000        6,900,000  
  
 
 
     
 
 
     
 
 
     
 
 
  
Basic and Diluted net income (loss) per ordinary share
    $ 0.19      $ 0.19      $ (0.04 )     $ (0.04 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed de minimis as of March 31, 2024 and December 31, 2023 and a full valuation allowance was recorded against such deferred tax assets.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31, 2024 and December 31, 2023.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
 
12
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU
2022-03,
ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the condensed financial statements.
The Company’s 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 accompanying unaudited condensed financial statements.
NOTE 3. INITIAL PUBLIC OFFERING
On August 17, 2021, the Company consummated its Initial Public Offering of 27,600,000 Units, which includes the exercise in full of the underwriters’ option to purchase 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.7 million, of which approximately $9.7 million and approximately $889,000 was for deferred underwriting commissions and offering costs allocated to derivate warrant liabilities, respectively.
Each Unit consists of one Class A ordinary share (such shares included in the Units being offered, the “Public Shares”), and three-fourths of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).
NOTE 4. RELATED PARTY TRANSACTIONS
Founder Shares
On March 31, 2021, the Sponsor paid $25,000 to cover certain expenses on behalf of the Company in exchange for issuance of 7,475,000 of the Company’s Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”). Shares and the associated amounts have been retroactively restated to reflect: (i) the surrender of 1,006,250 Class B ordinary shares to the Company for no consideration on August 6, 2021; and (ii) the share issue of 431,250 Class B ordinary shares on August 12, 2021; resulting in an aggregate of 6,900,000 Class B ordinary shares outstanding. The initial shareholders agreed to forfeit up to 900,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. The underwriters fully exercised the over-allotment on August 17, 2021; thus, these 900,000 Founder Shares were no longer subject to forfeiture.
The initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share
sub-divisions,
share capitalization, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the Initial Private Placement of 11,360,000 Private Placement Warrants at a price of $0.75 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $8.5 million.
 
13
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Each whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be
non-redeemable
for cash and exercisable on a cashless basis.
The Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell the Private Placement Warrants until 30 days after the completion of the initial Business Combination.
On each of August 4, 2022 and February 15, 2023, the Company consummated the Additional Private Placements of 3,680,000 Additional Private Placement Warrants at a price of $0.75 per Additional Private Placement Warrant, generating total proceeds in aggregate of $5,520,000. The Additional Private Placement Warrants were purchased by the Sponsor and are substantially similar to the Private Placement Warrants issued to the Sponsor at the time of the Company’s Initial Public Offering. The Additional Private Placement Warrants have been issued pursuant to, and are governed by, the Warrant Agreement that the Company entered into at the time of the Initial Public Offering. Upon closing of the Additional Private Placements, the proceeds received by the Company in connection with the issuance of the Additional Private Placement Warrants were deposited in the Trust Account.
Related Party Loans
On March 24, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan was
non-interest
bearing and payable upon the completion of the Initial Public Offering; provided that amounts due under the Note may, at the option of the Sponsor, be converted into Working Capital Loans (as defined below). The Company borrowed $150,000 under the Note in connection with the Initial Public Offering. The Sponsor elected to convert the Note into a Working Capital Loan upon closing of the Initial Public Offering.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a 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 (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans could be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $2,000,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $0.75 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Company has drawn $150,000 under the Note, which was converted into a Working Capital Loan on August 17, 2021. As of March 31, 2024 and December 31, 2023, the fair value of this Working Capital Loan was $150,000 in the accompanying condensed balance sheets.
On August 29, 2023, the Sponsor loaned the Company an aggregate of up to $950,250 to cover expenses related to the Company’s initial business combination pursuant to a promissory note (the “Second Note”). The Second Note is noninterest bearing and payable on the earliest of: (i) the consummation of the Company’s initial business combination unless converted into working capital warrants at the option of the Sponsor, at a price of $0.75 per warrant, as described in the registration statement that the Company filed in connection with the initial public offering of its securities, (ii) August 17, 2024, and (iii) the liquidation of the Company. Such working capital warrants would be identical to the private placement warrants issued to the Sponsor in a private placement in connection with the Company’s initial public offering. As of March 31, 2024 and December 31, 2023, the fair value of the Second Note was $950,250.
 
14
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Service and Administrative Fees
On August 12, 2021, the Company entered into an agreement with DEHC LLC, an affiliate of the Company’s Chief Financial Officer, pursuant to which the Company agreed to pay for service and administrative fees of $20,000 per month for 18 months (or until February 12, 2023). On August 29, 2023, the agreement was amended to extend the services for the period from August 17, 2023 to August 17, 2024 with the same monthly payment. For the three months ended March 31, 2024 and 2023, the Company incurred $60,000 and $20,000, respectively, for such expenses, included as general and administrative expenses-related party on the condensed statements of operations contained herein. As of March 31, 2024 and December 31, 2023, the Company had no outstanding balance for services in connection with such agreement.
The Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any
out-of-pocket
expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, officers, directors or their affiliates.
Non-Redemption
Agreements
On August 11, 2023 and August 14, 2023, the Company entered into
Non-Redemption
Agreements with various unaffiliated third parties pursuant to which these shareholders have committed not to redeem 2,600,000 of their Class A ordinary shares at the Extraordinary General Meeting held on August 15, 2023. In consideration of this agreement, the Sponsor has agreed to transfer 568,750 of its Class B ordinary shares to such investors at the closing of the Business Combination. The Company estimated the aggregate fair value of the Sponsor shares attributable to the
Non-Redemption
Agreements to be $0.6 million or $0.97 per share. The excess of the fair value of the Sponsor shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. The Company accounted for the transfer of the Sponsor’s shares to
non-redeeming
shareholders as a capital contribution by the Sponsor with a corresponding charge to additional
paid-in
capital to recognize the fair value of the shares transferred.
The fair value of the Sponsor shares was based on the following significant inputs:
 
    
August 15, 2023
  
Risk-free interest rate
      5.36 % 
Remaining life of SPAC
      0.62  
Underlying stock price
    $ 10.00  
Probability of transaction
      10 % 
NOTE 5. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
45-day
option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. The underwriters fully exercised the over-allotment on August 17, 2021.
 
15
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
The underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $5.5 million in the aggregate, paid upon the closing of the Initial Public Offering. $0.35 per unit, or approximately $9.7 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. 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.
Contingent Fee Arrangement
On August 3, 2023, the Company entered into an arrangement with J.V.B Financial Group, acting through its Cohen & Company Capital Markets division (“CCM”) to obtain capital market advisory services and to act as the Company’s placement agent in connection with raising capital with a specific target in its search for a Business Combination with an unaffiliated third party (“Target”). CCM would be entitled to an advisor fee of $2.0 million and a transaction fee of an amount equal to 5% of the sum of the gross proceeds raised from investors and received by the Company and Target plus proceeds released from the Trust Account without restriction with respect to any of the Class A ordinary shares that did not redeem such shares in connection with the Extension or the Business Combination (“Arrangement”). The Company may pay CCM a discretionary fee of $1.0 million if the Company determines in its sole discretion that the performance of CCM warrants such additional fee. Per the Arrangement, the fees for these services are contingent upon the closing of a Business Combination and therefore not included as liabilities on the accompanying condensed balance sheets. Under the Arrangement, the Company will also reimburse CCM for reasonable expenses. As of March 31, 2024 and December 31, 2023, no expenses have been claimed.
NOTE 6. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is authorized to issue 100,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. On August 15, 2023, holders of 23,057,267 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.67 per share, for an aggregate redemption amount of approximately $246.0 million. As of March 31, 2024 and December 31, 2023, there were 4,542,733 Class A ordinary shares outstanding, all of which were subject to possible redemption.
The Class A ordinary shares subject to possible redemption reflected on the condensed balance sheets are reconciled in the following table:
 
Class A ordinary shares subject to possible redemption, December 31, 2022
    $ 282,942,286  
Extension payment made by the Sponsor
      2,760,000
Redemption of Class A ordinary shares subject to possible redemption
      (245,963,349 ) 
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      9,377,784  
  
 
 
  
Class A ordinary shares subject to possible redemption, December 31, 2023
      49,116,721  
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      866,895  
  
 
 
  
Class A ordinary shares subject to possible redemption, March 31, 2024
    $ 49,983,616  
  
 
 
  
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares-
The Company is authorized to issue 1,000,000 preference shares, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2024 and December 31, 2023, there were no preference shares issued or outstanding.
Class
 A Ordinary Shares-
The Company is authorized to issue 100,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2024 and December 31, 2023, there were 4,542,733 Class A ordinary shares issued and outstanding, which were all subject to possible redemption and have been classified as temporary equity (see Note 6).
 
16
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
Class
 B Ordinary Shares-
The Company is authorized to issue 10,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of March 31, 2024 and December 31, 2023, there were 6,900,000 Class B ordinary shares issued and outstanding, which amounts have been adjusted to reflect the shares surrendered as discussed in Note 4.
Shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders; provided that, prior to the completion of the initial Business Combination, holders of the Class B ordinary shares will have the right to elect all of the Company’s directors and remove members of the Company’s board of directors for any reason. Prior to the completion of the initial Business Combination, only holders of the Class B ordinary shares will have the right to vote on the Company’s appointment of directors.
Holders of the Public Shares will not be entitled to vote on the Company’s appointment of directors during such time. In addition, prior to the completion of the initial Business Combination, holders of a majority of the outstanding Class B ordinary shares may remove a member of the Company’s board of directors for any reason. These provisions of the Memorandum and Articles may only be amended by a resolution passed by at least
two-thirds
(2/3) of all holders (which must include a simple majority of the holders of Class B ordinary shares). With respect to any other matter submitted to a vote of the Company’s shareholders, including any vote in connection with the initial Business Combination, holders of the Class A ordinary shares and holders of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders, except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holders, on a
one-for-one
basis, subject to adjustment for share
sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as described herein.
In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed Offering and related to the closing of the initial Business Combination, including pursuant to a specified future issuance, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the then-outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an
as-converted
basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued or issuable to any seller in the initial Business Combination).
NOTE 8. DERIVATIVE WARRANT LIABILITIES
As of March 31, 2024 and December 31, 2023, the Company had 20,700,000 Public Warrants and 18,720,000 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Public Warrants on a cashless basis under the circumstances specified in the warrant agreement). The Company agreed that as soon as practicable, but in no event later than 20 business days, after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file, and within 60 business days following the initial Business Combination to have declared effective, a post-effective amendment to the registration statement of which this Report forms a part or a new registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed; provided, that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its
 
17
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but it will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The warrants will have an exercise price of $11.50 per share, subject to adjustments. In addition, if (x) the Company issues additional shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share (as adjusted for share
sub-divisions,
share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Sponsor, initial shareholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the Initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of each warrant will be adjusted (to the nearest cent) such that the effective exercise price per full share will be equal to 115% of the higher of (i) the Market Value and (ii) the Newly Issued Price, and the $18.00 per share redemption trigger price described below will be adjusted (to the nearest cent) to be equal to 180% of the higher of (i) the Market Value and (ii) the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, except that (1) the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (2) the Private Placement Warrants are
non-redeemable,
(3) the Private Placement Warrants may be exercised by the holders on a cashless basis and (4) the holders of the Private Placement Warrants (including with respect to the ordinary shares issuable upon exercise of the Private Placement Warrants) are entitled to registration rights.
Redemption of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except for the Private Placement Warrants)
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per warrant;
 
  •  
upon a minimum of 30 days’ prior written notice of redemption; and
 
  •  
if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the
30-trading
day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
 
18
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:
March 31, 2024
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
      
Investments held in Trust Account-Money Market Funds
(1)
    $ 50,082,964      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 1,242,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $        $ 1,123,200  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
December 31, 2023
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
         
Investments held in Trust Account-Money Market Funds
(1)
    $ 49,216,069      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 2,070,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $ —       $ 1,872,000  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
 
(1)
Excludes $652 of cash balance held within the Trust Account as of March 31, 2024 and December 31, 2023.
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the three months ended March 31, 2024 or 2023.
Level 1 assets include investments in U.S. government securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The Public Warrants were valued using an observable market quote in an active market as of March 31, 2024 and December 31, 2023. As of March 31, 2024, the estimated fair value of the Private Placement Warrants and Working Capital Loans were based on the observable fair value of the Public Warrants as of March 31, 2024. As of December 31, 2023, the estimated fair value of the Private Placement Warrants and Working Capital Loan is determined using Black-Scholes option pricing model. For the three months ended March 31, 2024 and 2023, the Company recognized
a non-operating gain
from the change in fair value of derivative warrant liabilities of approximately $1.6 million and a
non-operating
loss of $3.2 million, respectively, and no change in fair value of the working capital loan in the accompanying unaudited condensed statements of operations.
The change in the valuation technique used to determine the fair value of the Private Placement Warrants and Working Capital loans was due to the limited market activity. The Company determined the fair value of each Private Warrant was consistent with that of a Public Warrant. For the fair value of the Working Capital Loans, the Company also relied on the fair value of the Public Warrants, as the warrants that would be converted from the Working Capital Loan would be identical to the Private Placement Warrants.
As of December 31, 2023 the estimated fair value of the Private Placement Warrants and Working Capital Loan was determined using Level 3 inputs. Inherent in a Black-Scholes option pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate, and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select
 
19
KENSINGTON CAPITAL ACQUISITION CORP. V
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 
peer companies’ ordinary shares that match the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information regarding Level 3 fair value measurements input for Private Placement Warrants, and Working Capital Loan at their measurement dates:
 
    
As of
December 31,
2023
  
Exercise price
    $ 11.50  
Stock price
    $ 10.69  
Volatility
      5.2 % 
Term (years)
      5.58  
Risk-free rate
      3.78 % 
Dividend yield
      0.00 % 
(Note: To determine the fair value of the Working Capital Loans, the Company relied on the inputs of the Private Placement Warrants, as the warrants that would be converted from the Working Capital Loan would be identical to the Private Placement Warrants.)
The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Derivative warrant liabilities as of December 31, 2022
    $ 2,556,800  
Issuance of Additional Private Placement Warrants
      552,000  
Change in fair value of derivative warrant liabilities
      (1,236,800 ) 
  
 
 
  
Derivative warrant liabilities as of December 31, 2023
      1,872,000  
Change in fair value of derivative warrant liabilities
      (748,800 ) 
  
 
 
  
Derivative warrant liabilities as of March 31, 2024 (unaudited)
    $ 1,123,200  
  
 
 
  
The change in the fair value of the Working Capital Loan-related party, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Working Capital Loan - related party as of December 31, 2022
    $ 150,000  
Additional Working Capital Loan - related party
      950,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of December 31, 2023
    $ 1,100,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of March 31, 2024 (unaudited)
    $ 1,100,250  
  
 
 
  
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment to or disclosure in the unaudited condensed financial statements.
 
 
20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References in this management’s discussion and analysis to the “Company,” “Kensington Capital Acquisition Corp. V,” “Kensington,” “our,” “us” or “we” refer to Kensington Capital Acquisition Corp. V. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed 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.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form
10-Q
includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21 E 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. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other U.S. Securities and Exchange Commission (“SEC”) filings.
Overview
We are a blank check company incorporated as a Cayman Islands exempted company on March 19, 2021. We were incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
As of March 31, 2024, we had not yet commenced operations. All activity for the period from March 19, 2021 (inception) through March 31, 2024 relates to our formation and the initial public offering (the “Initial Public Offering”), which is described below, and since the Initial Public Offering, our activity has been limited to the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. We will generate
non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering.
Our sponsor is Kensington Capital Sponsor V LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared effective on August 12, 2021. On August 17, 2021, we consummated the Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), which included the exercise in full of the underwriters’ option to purchase 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.7 million, of which approximately $9.7 million and approximately $889,000 was for deferred underwriting commissions and offering costs allocated to derivate warrant liabilities, respectively.
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (the “Initial Private Placement” and together with the Additional Private Placements (as defined below), the “Private Placements”) of 11,360,000 warrants (each, a “Private Placement Warrant” and collectively with the Additional Private Placement Warrants ( as defined below), the “Private Placement Warrants”) at a price of $0.75 per Private Placement Warrant to our Sponsor, generating proceeds of approximately $8.5 million.
Upon closing of the Initial Public Offering and the Initial Private Placement, $276.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and of the Private Placement Warrants in the Initial Private Placement were placed in a trust account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule
2a-7
under the Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described below.
 
21
On each of August 4, 2022 and February 15, 2023, in connection with the Extensions as described below, we consummated a private placement (each, an “Additional Private Placement” and collectively, the “Additional Private Placements”) of 3,680,000 warrants (each, an “Additional Private Placement Warrant” and collectively, the “Additional Private Placement Warrants”) at a price of $0.75 per Additional Private Placement Warrant, generating total proceeds in aggregate of $5,520,000. The Additional Private Placement Warrants were purchased by the Sponsor and are substantially similar to the Private Placement Warrants issued to the Sponsor at the time of the Initial Public Offering. The Additional Private Placement Warrants were issued pursuant to, and are governed by, the Warrant Agreement that we entered into at the time of the Initial Public Offering. Upon closing of the Additional Private Placements, the proceeds received by us in connection with the issuance of the Additional Private Placement Warrants were deposited in the Trust Account.
On August 11, 2023 and August 14, 2023, the Sponsor and the Company entered into agreements (the
“Non-Redemption
Agreements”) with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 2,600,000 Class A ordinary shares (the
“Non-Redeemed
Shares”) of the Company at the extraordinary general meeting called by the Company (the “Extraordinary General Meeting”) to approve, among other proposals, an extension of time for the Company to consummate an initial business combination from August 17, 2023 to August 17, 2024 (the“ Extension”). In exchange for the foregoing commitment not to redeem such shares, the Sponsor has agreed to transfer to such investors an aggregate of 568,750 Class B ordinary shares of the Company held by the Sponsor immediately following the consummation of an initial business combination if they continued to hold such
Non-Redeemed
Shares through the Extraordinary General Meeting. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023 and the investors subject to the
Non-Redemption
Agreements did not redeem their shares. The Company estimated the aggregate fair value of the Sponsor shares attributable to the
Non-Redemption
Agreements to be $0.6 million or $0.97 per share. In connection with the Extraordinary General Meeting, holders of 23,057,267 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.67 per share, for an aggregate redemption amount of approximately $246.0 million.
Our management has broad discretion with respect to the specific application of the net proceeds of its Initial Public Offering and the sale of Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
We initially had 12 months from the closing of the Initial Public Offering to consummate the initial Business Combination. However, we were able, by resolution of our board of directors at the option of our Sponsor, to extend the period of time we had to consummate an initial Business Combination up to two times, each by an additional 6 months (for a total of up to an additional 12 months from the closing of the Initial Public Offering), subject to our Sponsor purchasing additional Private Placement Warrants. Pursuant to the terms of our amended and restated memorandum and articles of association (the “Memorandum and Articles”), in order to extend the period of time to consummate an initial Business Combination in such a manner, our Sponsor was required to purchase an additional 3,680,000 Private Placement Warrants, at a price of $0.75 per warrant, and deposit $0.10 per each Unit (for an aggregate of approximately $2.8 million), in proceeds into the Trust Account on or prior to the date of the applicable deadline, for each
6-month
extension. On August 4, 2022 and February 15, 2023, we elected to extend the date by which the Company must consummate a business combination by 6 months each time to August 17, 2023 (the “Extensions”). On July 28, 2023, the Company filed a definitive proxy statement for the solicitation of proxies in connection with the Extraordinary General Meeting of the Company’s shareholders held on August 15, 2023 to consider and vote on, among other proposals, an amendment to the Company’s Memorandum and Articles to extend the date by which the Company must consummate a business combination from August 17, 2023 to August 17, 2024. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023.
Liquidity and Going Concern
As of March 31, 2024, we had approximately $1.1 million in our operating bank account and a working capital deficit of approximately $2.3 million.
 
22
Our liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from our Sponsor to cover for certain expenses on behalf of us in exchange for issuance of Founder Shares (as defined in Note 4 to Unaudited Condensed Financial Statements), and the loan from the Sponsor of approximately $150,000 under the Note (as defined in Note 4 to Unaudited Condensed Financial Statements), which was converted into a Working Capital Loan (as defined in Note 4 to Unaudited Condensed Financial Statements) on August 17, 2021. Subsequent to the consummation of the Initial Public Offering, our liquidity needs have been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Initial Private Placement held outside of the Trust Account. 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 (see Note 4 to Unaudited Condensed Financial Statements). As of March 31, 2024 and December 31, 2023, the fair value of the Working Capital Loan was $150,000.
On August 29, 2023, the Sponsor loaned us an aggregate of up to $950,250 to cover expenses related to the Company’s initial business combination pursuant to a promissory note (the “Second Note”). The Second Note is noninterest bearing and payable on the earliest of: (i) the consummation of the Company’s initial business combination unless converted into working capital warrants at the option of the Sponsor, at a price of $0.75 per warrant, as described in the registration statement that the Company filed in connection with the initial public offering of its securities, (ii) August 17, 2024, and (iii) the liquidation of the Company. Such working capital warrants would be identical to the private placement warrants issued to the Sponsor in a private placement in connection with the Company’s initial public offering. As of March 31, 2024 and December 31, 2023, the fair value of the Second Note was $950,250.
Based upon the analysis above, management has determined that we do not have sufficient liquidity to meet our anticipated obligations for at least twelve months after the financial statements are issued, as such, the events and circumstances raise substantial doubt about our ability to continue as a going concern. In connection with our assessment of going concern considerations in accordance with the
ASC 205-40, we
have until August 17, 2024 to consummate a Business Combination. It is uncertain that we will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raise substantial doubt about our ability to continue as a going concern.
Risks and Uncertainties
The continuing military conflict between the Russian Federation and Ukraine, the military action between Hamas and Israel, and the risk of escalations of other military conflicts have created and are expected to create global economic consequences. The impact of these actions and related sanctions on the world economy are not determinable as of the date of the accompanying unaudited condensed financial statements. The specific impact on our financial condition, results of operations, and cash flows is also not determinable as of the date of the accompanying unaudited condensed financial statements.
Results of Operations
Our entire activity from March 19, 2021 (inception) through March 31, 2024 was in preparation for the Initial Public Offering, and since our Initial Public Offering, our activity has been limited to the search for a prospective initial Business Combination. We will not generate any operating revenues until the closing and completion of our initial Business Combination.
For the three months ended March 31, 2024, we had a net income of approximately $2.2 million, which consisted of approximately $0.9 million of income from investments held in the Trust Account and a
non-cash
gain of approximately $1.6 million for the change in fair value of derivative warrant liabilities, partly offset by approximately $0.2 million in general and administrative expenses, and $60,000 in administrative expenses-related party.
For the three months ended March 31, 2023, we had a net loss of approximately $1.5 million, which consisted of
a non-cash loss
of approximately $3.2 million for the change in fair value of derivative warrant liabilities, approximately $1.0 million in general and administrative expenses, and $20,000 in administrative expenses-related party, partly offset by approximately $2.7 million of income from investments held in the Trust Account.
 
23
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. These holders are entitled to certain demand and “piggyback” registration rights. We 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 the final prospectus relating to the Initial Public Offering to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. The underwriters fully exercised the over-allotment on August 17, 2021.
The underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $5.5 million in the aggregate, paid upon the closing of the Initial Public Offering. $0.35 per unit, or approximately $9.7 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. 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.
Contingent Fee Arrangement
On August 3, 2023, the Company entered into an arrangement with J.V.B Financial Group, acting through its Cohen & Company Capital Markets division (“CCM”) to obtain capital market advisory services and to act as the Company’s placement agent in connection with raising capital with a specific target in its search for a Business Combination with an unaffiliated third party (“Target”). CCM would be entitled to an advisor fee of $2.0 million and a transaction fee of an amount equal to 5% of the sum of the gross proceeds raised from investors and received by the Company and Target plus proceeds released from the Trust Account without restriction with respect to any of the Class A ordinary shares that did not redeem such shares in connection with the Extension or the Business Combination (“Arrangement”). The Company may pay CCM a discretionary fee of $1.0 million if the Company determines in its sole discretion that the performance of CCM warrants such additional fee. Per the Arrangement, the fees for these services are contingent upon the closing of a Business Combination and therefore not included as liabilities on the accompanying condensed balance sheets. Under the Arrangement, the Company will also reimburse CCM for reasonable expenses. As of March 31, 2024 and December 31, 2023, no expenses have been claimed.
Service and Administrative Fees
On August 12, 2021, we entered into an agreement with DEHC LLC, an affiliate the Company’s Chief Financial Officer, pursuant to which we agreed to pay for service and administrative fees of $20,000 per month for 18 months (or until February 12, 2023). On August 29, 2023, the agreement was amended to extend the services for the period from August 17, 2023 to August 17, 2024 with the same monthly payment. For the three months ended March 31, 2024 and 2023, we incurred $60,000 and $20,000, respectively, for such expenses, included as general and administrative expenses-related party on the condensed statements of operations contained herein. As of March 31, 2024 and December 31, 2023, we had no outstanding balance for services in connection with such agreement.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our condensed financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the following as our critical accounting policies and estimates:
 
24
Derivative Financial Instruments
We evaluate our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then
re-valued
at each reporting date, with changes in the fair value reported in the condensed statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. The determination of the fair value of the warrant liabilities may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A 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, 4,542,733 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets as of March 31, 2024 and December 31, 2023.
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the Class A ordinary shares subject to possible redemption to equal the redemption value at the end of each reporting period. This method would view the end of the reporting period as if it were also the redemption date for the security. Effective with the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which resulted in charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
Offering Costs Associated with Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as
non-operating
expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has 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 (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment) and the Private Placement Warrants to purchase an aggregate of 39,420,000 Class A ordinary shares, or the effects of the 1,467,000 shares underlying the
 
25
warrants that would be issuable upon conversion of the Working Capital Loans in the calculation of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. The Company has considered the effect of Class B ordinary shares that were excluded from the weighted average number of basic shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares. Remeasurement of the redeemable Class A ordinary shares is excluded from net income (loss) per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU
2022-03,
ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for us in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. We are still evaluating the impact of this pronouncement on the condensed financial statements.
Our management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our unaudited condensed financial statements.
Off-Balance
Sheet Arrangements
As of March 31, 2024, 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
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 will qualify as an “emerging growth company” and under the JOBS Act will be 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 such, our financial statements may not be comparable to companies that comply with 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) 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.
Item 3. 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.
 
26
Item 4. 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 quarter ended March 31, 2024, 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 effective as of March 31, 2024.
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.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2024 covered by this Quarterly Report on Form
10-Q
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
27
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
As of the date of this Quarterly Report on Form
10-Q,
there have been no material changes to the risk factors disclosed in our Annual Report on
Form 10-K
for the year ended December 31, 2023 filed with the SEC on March 29, 2024. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
 
28
Item 6. Exhibits
 
Exhibit
Number
   
Description
31.1*    Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*    Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**    Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**    Certification of Chief Financial Officer (Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*    Inline XBRL Instance Document.
101.SCH*    Inline XBRL Taxonomy Extension Schema Document.
101.CAL*    Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*    Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*    Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*    Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104    Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
 
*
Filed herewith.
**
These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
 
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
   
KENSINGTON CAPITAL ACQUISITION CORP. V
Date: May 20, 2024      
/s/ Justin Mirro
    Name:   Justin Mirro
    Title:  
Chief Executive Officer
(Principal Executive Officer)
Date: May 20, 2024      
/s/ Daniel Huber
    Name:   Daniel Huber
    Title:  
Chief Financial Officer
(Principal Financial Officer)
 
30

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Justin Mirro, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Kensington Capital Acquisition Corp. V;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 20, 2024     By:   /s/ Justin Mirro
      Justin Mirro
      Chief Executive Officer
  (Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel Huber, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 of Kensington Capital Acquisition Corp. V;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c.

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d.

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 20, 2024     By:   /s/ Daniel Huber
      Daniel Huber
      Chief Financial Officer
      (Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kensington Capital Acquisition Corp. V (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Justin Mirro, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 20, 2024     By:   /s/ Justin Mirro
      Justin Mirro
      Chief Executive Officer
      (Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kensington Capital Acquisition Corp. V (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel Huber, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

 

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: May 20, 2024     By:   /s/ Daniel Huber
      Daniel Huber
      Chief Financial Officer
      (Principal Financial Officer)
v3.24.1.1.u2
Cover Page - shares
 3 Months Ended
Mar. 31, 2024
May 17, 2024
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Current Fiscal Year End Date --12-31  
Document Quarterly Report true  
Document Transition Report false  
Entity Registrant Name KENSINGTON CAPITAL ACQUISITION CORP. V  
Entity Central Index Key 0001865407  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Incorporation, State or Country Code E9  
Entity Tax Identification Number 98-1592043  
Entity File Number 001-40741  
Entity Address, Address Line One 1400 Old Country Road  
Entity Address, Address Line Two Suite 301  
Entity Address, City or Town Westbury  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 11590  
City Area Code 703  
Local Phone Number 674-6514  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company true  
Units [Member]    
Document Information [Line Items]    
Title of 12(b) Security Units, each consisting of one Class A ordinary share, $0.0001 par value, and three-fourths of one redeemable warrant  
Trading Symbol KCGI.U  
Security Exchange Name NYSE  
Class A ordinary shares [Member]    
Document Information [Line Items]    
Title of 12(b) Security Class A ordinary shares  
Trading Symbol KCGI  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   4,542,733
Warrant [Member]    
Document Information [Line Items]    
Title of 12(b) Security Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50  
Trading Symbol KCGI WS  
Security Exchange Name NYSE  
Class B ordinary shares [Member]    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   6,900,000
v3.24.1.1.u2
Condensed Balance Sheets - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Current assets:    
Cash $ 1,120,360 $ 1,222,918
Prepaid expenses 77,248 127,183
Total current assets 1,197,608 1,350,101
Investments held in Trust Account 50,083,616 49,216,721
Total Assets 51,281,224 50,566,822
Current liabilities:    
Accounts payable 197,311 132,705
Accrued expenses 2,209,888 2,140,748
Working Capital Loan -current related party 1,100,250 1,100,250
Total current liabilities 3,507,449 3,373,703
Deferred underwriting commissions in connection with the initial public offering 9,660,000 9,660,000
Derivative warrant liabilities 2,365,200 3,942,000
Total Liabilities 15,532,649 16,975,703
Commitments and Contingencies (Note 5)
Shareholders' Deficit    
Preference shares, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding as of March 31, 2024 and December 31, 2023
Additional paid-in capital 0 0
Accumulated deficit (14,235,731) (15,526,292)
Total shareholders' deficit (14,235,041) (15,525,602)
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders' Deficit 51,281,224 50,566,822
Class A ordinary shares [Member]    
Current liabilities:    
Class A ordinary shares subject to possible redemption, 4,542,733 shares at redemption value of approximately $11.00 and $10.81 per share as of March 31, 2024 and December 31, 2023, respectively 49,983,616 49,116,721
Shareholders' Deficit    
Common stock 0 0
Class B ordinary shares [Member]    
Shareholders' Deficit    
Common stock $ 690 $ 690
v3.24.1.1.u2
Condensed Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2024
Dec. 31, 2023
Preference stock, Par or stated value per share $ 0.0001 $ 0.0001
Preference stock, Shares authorized 1,000,000 1,000,000
Preference stock, Shares issued 0 0
Preference stock, Shares outstanding 0 0
Class A ordinary shares [Member]    
Temporary equity shares issued 4,542,733 4,542,733
Temporary equity shares outstanding 4,542,733 4,542,733
Temporary equity redemption value per share $ 11 $ 10.81
Common stock, par or stated value per share $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 4,542,733 4,542,733
Common stock, shares outstanding 4,542,733 4,542,733
Class A ordinary shares [Member] | Not Subject To Redemption [Member]    
Common stock, shares issued 0 0
Common stock, shares outstanding 0 0
Class B ordinary shares [Member]    
Common stock, par or stated value per share $ 0.0001 $ 0.0001
Common stock, shares authorized 10,000,000 10,000,000
Common stock, shares issued 6,900,000 6,900,000
Common stock, shares outstanding 6,900,000 6,900,000
v3.24.1.1.u2
Condensed Statements of Operations - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
General and administrative expenses $ 226,239 $ 1,022,665
Selling, General, and Administrative Expenses, Related Party, Type [Extensible Enumeration] Related Party [Member] Related Party [Member]
Administrative expenses - related party $ 60,000 $ 20,000
Loss from operations (286,239) (1,042,665)
Other income (expenses):    
Change in fair value of derivative warrant liabilities 1,576,800 (3,227,200)
Income from investments held in Trust Account 866,895 2,732,154
Total other income (expenses) 2,443,695 (495,046)
Net income (loss) 2,157,456 (1,537,711)
Common Class A [Member]    
Other income (expenses):    
Net income (loss) $ 856,504 $ (1,230,169)
Weighted average shares outstanding basic 4,542,733 27,600,000
Weighted average shares outstanding diluted 4,542,733 27,600,000
Basic net income (loss) per share $ 0.19 $ (0.04)
Diluted net income (loss) per share $ 0.19 $ (0.04)
Common Class B [Member]    
Other income (expenses):    
Net income (loss) $ 1,300,952 $ (307,542)
Weighted average shares outstanding basic 6,900,000 6,900,000
Weighted average shares outstanding diluted 6,900,000 6,900,000
Basic net income (loss) per share $ 0.19 $ (0.04)
Diluted net income (loss) per share $ 0.19 $ (0.04)
v3.24.1.1.u2
Condensed Statements of Changes in Shareholders' Deficit - USD ($)
Total
Class A ordinary shares [Member]
Class B ordinary shares [Member]
Common Stock [Member]
Class A ordinary shares [Member]
Common Stock [Member]
Class B ordinary shares [Member]
Additional Paid-in Capital [Member]
Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2022 $ (15,083,590)       $ 690 $ 0 $ (15,084,280)
Beginning balance, shares at Dec. 31, 2022         6,900,000    
Excess of cash received over fair value of Additional Private Placement Warrants 2,208,000         2,208,000 0
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption (5,492,154)         (2,208,000) (3,284,154)
Net Income (Loss) (1,537,711) $ (1,230,169) $ (307,542)       (1,537,711)
Ending balance at Mar. 31, 2023 (19,905,455)     $ 0 $ 690 0 (19,906,145)
Ending balance, shares at Mar. 31, 2023       0 6,900,000    
Beginning balance at Dec. 31, 2022 (15,083,590)       $ 690 0 (15,084,280)
Beginning balance, shares at Dec. 31, 2022         6,900,000    
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption   (9,377,784)          
Ending balance at Dec. 31, 2023 (15,525,602)     $ 0 $ 690 0 (15,526,292)
Ending balance, shares at Dec. 31, 2023       0 6,900,000    
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption (866,895) (866,895)       0 (866,895)
Net Income (Loss) 2,157,456 $ 856,504 $ 1,300,952       2,157,456
Ending balance at Mar. 31, 2024 $ (14,235,041)     $ 0 $ 690 $ 0 $ (14,235,731)
Ending balance, shares at Mar. 31, 2024       0 6,900,000    
v3.24.1.1.u2
Condensed Statements of Cash Flows - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash Flows from Operating Activities:    
Net Income (Loss) $ 2,157,456 $ (1,537,711)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Change in fair value of derivative warrant liabilities (1,576,800) 3,227,200
Income from investments held in Trust Account (866,895) (2,732,154)
Changes in operating assets and liabilities:    
Prepaid expenses 49,935 10,556
Accounts payable 64,606 46,037
Accrued expenses 69,140 845,716
Net cash used in operating activities (102,558) (140,356)
Cash Flows from Investing Activities:    
Cash deposited in Trust Account 0 (2,760,000)
Net cash used in investing activities 0 (2,760,000)
Cash Flows from Financing Activities:    
Proceeds received from private placement 0 2,760,000
Net cash provided by financing activities 0 2,760,000
Net change in cash (102,558) (140,356)
Cash - beginning of the period 1,222,918 1,235,676
Cash - end of the period 1,120,360 1,095,320
Supplemental disclosure of non-cash activities:    
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption $ 866,895 $ 2,732,154
v3.24.1.1.u2
Pay vs Performance Disclosure - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Pay vs Performance Disclosure    
Net Income (Loss) $ 2,157,456 $ (1,537,711)
v3.24.1.1.u2
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.1.1.u2
Description of Organization and Business Operations
 3 Months Ended
Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Organization and Business Operations
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
Kensington Capital Acquisition Corp. V (the “Company” or “Kensington”) was incorporated on March 19, 2021 as a Cayman Islands exempted company. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company is an emerging growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.
As of March 31, 2024, the Company had not commenced any operations. All activity for the period from March 19, 2021 (inception) through March 31, 2024 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) described below, and since the Initial Public Offering, its search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates
non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering.
The Company’s sponsor is Kensington Capital Sponsor V LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on August 12, 2021. On August 17, 2021, the Company consummated its Initial Public Offering of 27,600,000 units (the “Units” and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), which includes the exercise in full of the underwriters’ option to purchase 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.7 million, of which approximately $9.7 million and approximately $889,000 was for deferred underwriting commissions (see Note 5) and offering costs allocated to derivate warrant liabilities, respectively.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private placement (the “Initial Private Placement” and together with the Additional Private Placement (as defined below), the “Private Placements”) of 11,360,000 warrants (each, a “Private Placement Warrant” and collectively with the Additional Private Placement Warrants (as defined below), the “Private Placement Warrants”) at a price of $0.75 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $8.5 million (see Note 4).
Upon closing of the Initial Public Offering and the Initial Private Placement , $276.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial Public Offering and of the Private Placement Warrants in the Initial Private Placement were placed in a trust account (the “Trust Account”) located in the United States with Continental Stock Transfer & Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule
2a-7
under the Investment Company Act, which invest only in direct U.S. government treasury obligations, 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.
On each of August 4, 2022 and February 15, 2023, in connection with the Extensions as described below, the Company consummated an additional private placement (each, an “Additional Private Placement” and collectively, the “Additional Private Placements”) of 3,680,000 warrants (each, an “Additional Private Placement Warrant” and collectively, the “Additional Private Placement Warrants”) at a price of $0.75 per Additional Private Placement Warrant, generating total proceeds in aggregate of $5,520,000. The Additional Private Placement Warrants were purchased by the Sponsor and are substantially similar to the Private Placement Warrants issued to the Sponsor at the time of the Company’s Initial Public Offering. The Additional Private Placement Warrants were issued pursuant to, and are governed by, the Warrant Agreement that the Company entered into at the time of the Initial Public Offering. Upon closing of the Additional Private Placements, the proceeds received by the Company in connection with the issuance of the Additional Private Placement Warrants were deposited in the Trust Account.
On August 11, 2023 and August 14, 2023, the Sponsor and the Company entered into agreements (the
“Non-Redemption
Agreements”) with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 2,600,000 Class A ordinary shares (the
“Non-Redeemed
Shares”) of the Company at the extraordinary general meeting called by the Company (the “Extraordinary General Meeting”) to approve, among other proposals,
 
an extension of time for the Company to consummate an initial business combination from August 17, 2023 to August 17, 2024 (the “Extension”). In exchange for the foregoing commitment not to redeem such shares, the Sponsor has agreed to transfer to such investors an aggregate of 568,750 Class B ordinary shares of the Company held by the Sponsor immediately following the consummation of an initial business combination if they continued to hold such
Non-Redeemed
Shares through the Extraordinary General Meeting. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023 and the investors subject to the
Non-Redemption
Agreements did not redeem their shares. The Company estimated the aggregate fair value of the Sponsor shares attributable to the
Non-Redemption
Agreements to be $0.6 million or $0.97 per share. In connection with the Extraordinary General Meeting, holders of 23,057,267 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.67 per share, for an aggregate redemption amount of approximately $246.0 million.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete an initial Business Combination with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount). However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.
The Company will provide holders of the Company’s outstanding Class A ordinary shares, par value $0.0001 per share, sold in the Initial Public Offering (the “Public Shareholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The Public Shareholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then held in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s taxes, net of taxes payable, calculated as of two business days prior to the initial Business Combination. The
per-share
amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). These Public Shares were recorded at a redemption value and classified as temporary equity in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if a majority of the shares voted are voted in favor of the Business Combination. The Company will not redeem the Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. If a shareholder vote is not required by applicable law or stock exchange rule and the Company does not decide to hold a shareholder vote for business or other reasons, the Company will, pursuant to its amended and restated memorandum and articles of association (the “Memorandum and Articles”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, shareholder approval of the transaction is required by applicable law or stock exchange rule, or the Company decides to obtain shareholder approval for business or reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares without voting, and if they do vote, irrespective of whether they vote for or against the proposed transaction. If the Company seeks shareholder approval in connection with a Business Combination, the initial shareholders (as defined below) agreed to vote any Founder Shares (as defined below in Note 4) and any Public Shares held by them in favor of a Business Combination.
The Memorandum and Articles provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor and the Company’s officers and directors (the “initial shareholders”) agreed, pursuant to a letter
 
agreement with the Company, that they will not propose any amendment to the Memorandum and Articles (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete a Business Combination by August 17, 2024 (the “Combination Period”) or (B) with respect to any other provision relating to shareholders’ rights or
pre-initial
Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Public Shares upon approval of any such amendment at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding Public Shares.
The Company initially had 12 months from the closing of the Initial Public Offering to consummate the initial Business Combination. However, if the Company anticipated that it may not be able to consummate the initial Business Combination within 12 months, the Company was permitted to, by resolution of its board of directors at the option of the Sponsor, extend the period of time the Company had to consummate an initial Business Combination up to two times, each by an additional 6 months (for a total of up to an additional 12 months from the closing of the Initial Public Offering), subject to the Sponsor purchasing additional Private Placement Warrants. The Company’s shareholders were not entitled to vote on or redeem their shares in connection with any such extension. Pursuant to the terms of the Memorandum and Articles, in order to extend the period of time to consummate an initial Business Combination in such a manner, the Sponsor had to purchase an additional 3,680,000 Private Placement Warrants, at a price of $0.75 per warrant, and deposit $0.10 per each Unit (for an aggregate of approximately $2.8 million), in proceeds into the Trust Account on or prior to the date of the applicable deadline, for
each 6-month extension.
On August 4, 2022 and February 15, 2023, the Company elected to extend the Combination Period by 6 months each time to August 17, 2023 (the “Extensions”). On July 28, 2023, the Company filed a definitive proxy statement for the solicitation of proxies in connection with the Extraordinary General Meeting of the Company’s shareholders held on August 15, 2023 to consider and vote on, among other proposals, an amendment to the Company’s Memorandum and Articles to extend the date by which the Company must consummate a business combination from August 17, 2023 to August 17, 2024. The extension to consummate a business combination from August 17, 2023 to August 17, 2024 was approved by the Company’s shareholders on August 15, 2023.
The initial shareholders agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete a Business Combination within the Combination Period. However, if the initial shareholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination within the Combination Period. The underwriters agreed to waive their rights to the deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only, or less than, $10.00. In order to protect the amounts held in the Trust Account, the Sponsor agreed to be liable to the Company if and to the extent any claims by a third party (except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement (a “Target”), reduce the amount of funds in the Trust Account to below the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, then the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
 
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply
to non-emerging
growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Risks and Uncertainties
The continuing military conflict between the Russian Federation and Ukraine, the military action between Hamas and Israel, and the risk of escalations of other military conflicts have created and are expected to create global economic consequences. The impact of these actions and related sanctions on the world economy are not determinable as of the date of these unaudited condensed financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed financial statements.
Liquidity and Going Concern
As of March 31, 2024, the Company had approximately $1.1 million in its operating bank account and a working capital deficit of approximately $2.3 million.
The Company’s liquidity needs prior to the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor to cover for certain expenses on behalf of the Company in exchange for issuance of Founder Shares (as defined in Note 4), and the loan from the Sponsor of approximately $150,000 under the Note (as defined in Note 4), which was converted into a Working Capital Loan (as defined in Note 4) on August 17, 2021. Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity needs have been satisfied through the net proceeds from the consummation of the Initial Public Offering and the Initial Private Placement held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a 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, provide the Company Working Capital Loans (see Note 4). As of March 31, 2024 and December 31, 2023, the fair value of the Working Capital Loan was $150,000 (see Note 4).
On August 29, 2023, the Sponsor loaned the Company an aggregate of up to $950,250 to cover expenses related to the Company’s initial business combination pursuant to a promissory note (the “Second Note”). The Second Note is noninterest bearing and payable on the earliest of: (i) the consummation of the Company’s initial business combination unless converted into working capital warrants at the option of the Sponsor, at a price of $0.75 per warrant, as described in the registration statement that the Company filed in connection with the initial public offering of its securities, (ii) August 17, 2024, and (iii) the liquidation of the Company. Such working capital warrants would be identical to the private placement warrants issued to the Sponsor in a private placement in connection with the Company’s initial public offering. As of March 31, 2024 and December 31, 2023, the fair value of the Second Note was $950,250 (see Note 4).
 
Based upon the analysis above, management has determined that the Company does not have sufficient liquidity to meet its anticipated obligations for at least twelve months after the financial statements are issued, as such, the events and circumstances raise substantial doubt about the Company’s ability to continue as a going concern. In connection with our assessment of going concern considerations in accordance with the ASC
205-40,
the Company has until August 17, 2024 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the liquidity condition and mandatory liquidation, should a Business Combination not occur, and potential subsequent dissolution raise substantial doubt about the Company’s ability to continue as a going concern.
v3.24.1.1.u2
Basis of Presentation and Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of Presentation and Summary of Significant Accounting Policies
NOTE 2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 8 of Regulation
S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K
(the “Form
10-K”)
for the year ended December 31, 2023, as filed with the SEC on March 29, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2023, is derived from the audited financial statements presented in the Form
10-K.
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of income and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2024 and December 31, 2023.
Investments Held in Trust Account
The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income on investments held in the Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of March 31, 2024 and December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the unaudited condensed balance sheets.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC
815-15.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
The 20,700,000 warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the 18,720,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC
815-40.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed statements of operations. The fair value of the Public Warrants issued in connection with the Public Offering were initially estimated using a Monte Carlo simulation model. For periods where no observable traded price is available, the fair value continues to be estimated using a Monte Carlo simulation. The fair value of the Private Placement Warrants is determined using
 
Black-Scholes option pricing model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Working Capital Loans-Related Party
The Company has elected the fair value option to account for its Working Capital Loans with its Sponsor as defined and more fully described in Note 4. As a result of applying the fair value option, the Company records the loans fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recorded as change in the fair value of Working Capital Loans reported in the condensed statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s and, if applicable, an independent third-party valuation firm’s own assumption about the assumptions a market participant would use in pricing the asset or liability.
Offering Costs Associated with Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as
non-operating
expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A 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, 4,542,733 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets as of March 31, 2024 and December 31, 2023.
Effective with the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which resulted in charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has 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 (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment) and the Private Placement Warrants to purchase an aggregate of 39,420,000 Class A ordinary shares, or the effects of the 1,467,000 shares underlying the warrants that would be issuable upon conversion of the Working Capital Loans (as defined in Note 4) in the calculation
 
of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. The Company has considered the effect of Class B ordinary shares that were excluded from the weighted average number of basic shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares. Remeasurement of the redeemable Class A ordinary shares is excluded from net income per share as the
redemption
value approximates fair value.
The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
 
    
For the
Three Months Ended
March 31, 2024
     
For the
Three Months Ended
March 31, 2023
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and Diluted net income (loss) per ordinary share:
            
Numerator:
            
Allocation of net income (loss)
    $ 856,504      $ 1,300,952      $ (1,230,169 )     $ (307,542 ) 
Denominator:
            
Basic and Diluted weighted average ordinary shares outstanding
      4,542,733        6,900,000        27,600,000        6,900,000  
  
 
 
     
 
 
     
 
 
     
 
 
  
Basic and Diluted net income (loss) per ordinary share
    $ 0.19      $ 0.19      $ (0.04 )     $ (0.04 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed de minimis as of March 31, 2024 and December 31, 2023 and a full valuation allowance was recorded against such deferred tax assets.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31, 2024 and December 31, 2023.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
 
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU
2022-03,
ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the condensed financial statements.
The Company’s 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 accompanying unaudited condensed financial statements.
v3.24.1.1.u2
Initial Public Offering
 3 Months Ended
Mar. 31, 2024
Stockholders' Equity Note [Abstract]  
Initial Public Offering
NOTE 3. INITIAL PUBLIC OFFERING
On August 17, 2021, the Company consummated its Initial Public Offering of 27,600,000 Units, which includes the exercise in full of the underwriters’ option to purchase 3,600,000 Units, at $10.00 per Unit, generating gross proceeds of $276.0 million, and incurring offering costs of approximately $15.7 million, of which approximately $9.7 million and approximately $889,000 was for deferred underwriting commissions and offering costs allocated to derivate warrant liabilities, respectively.
Each Unit consists of one Class A ordinary share (such shares included in the Units being offered, the “Public Shares”), and three-fourths of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 7).
v3.24.1.1.u2
Related Party Transactions
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Related Party Transactions
NOTE 4. RELATED PARTY TRANSACTIONS
Founder Shares
On March 31, 2021, the Sponsor paid $25,000 to cover certain expenses on behalf of the Company in exchange for issuance of 7,475,000 of the Company’s Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”). Shares and the associated amounts have been retroactively restated to reflect: (i) the surrender of 1,006,250 Class B ordinary shares to the Company for no consideration on August 6, 2021; and (ii) the share issue of 431,250 Class B ordinary shares on August 12, 2021; resulting in an aggregate of 6,900,000 Class B ordinary shares outstanding. The initial shareholders agreed to forfeit up to 900,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering. The underwriters fully exercised the over-allotment on August 17, 2021; thus, these 900,000 Founder Shares were no longer subject to forfeiture.
The initial shareholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share
sub-divisions,
share capitalization, reorganizations, recapitalizations and the like) for any 20 trading days within any
30-trading
day period commencing at least 150 days after the initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Company consummated the Initial Private Placement of 11,360,000 Private Placement Warrants at a price of $0.75 per Private Placement Warrant to the Sponsor, generating proceeds of approximately $8.5 million.
 
Each whole Private Placement Warrant is exercisable for one whole Class A ordinary share at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the sale of the Private Placement Warrants to the Sponsor was added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be
non-redeemable
for cash and exercisable on a cashless basis.
The Sponsor agreed, subject to limited exceptions, not to transfer, assign or sell the Private Placement Warrants until 30 days after the completion of the initial Business Combination.
On each of August 4, 2022 and February 15, 2023, the Company consummated the Additional Private Placements of 3,680,000 Additional Private Placement Warrants at a price of $0.75 per Additional Private Placement Warrant, generating total proceeds in aggregate of $5,520,000. The Additional Private Placement Warrants were purchased by the Sponsor and are substantially similar to the Private Placement Warrants issued to the Sponsor at the time of the Company’s Initial Public Offering. The Additional Private Placement Warrants have been issued pursuant to, and are governed by, the Warrant Agreement that the Company entered into at the time of the Initial Public Offering. Upon closing of the Additional Private Placements, the proceeds received by the Company in connection with the issuance of the Additional Private Placement Warrants were deposited in the Trust Account.
Related Party Loans
On March 24, 2021, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan was
non-interest
bearing and payable upon the completion of the Initial Public Offering; provided that amounts due under the Note may, at the option of the Sponsor, be converted into Working Capital Loans (as defined below). The Company borrowed $150,000 under the Note in connection with the Initial Public Offering. The Sponsor elected to convert the Note into a Working Capital Loan upon closing of the Initial Public Offering.
In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a 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 (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans could be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination or, at the lender’s discretion, up to $2,000,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $0.75 per warrant. The warrants would be identical to the Private Placement Warrants. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Company has drawn $150,000 under the Note, which was converted into a Working Capital Loan on August 17, 2021. As of March 31, 2024 and December 31, 2023, the fair value of this Working Capital Loan was $150,000 in the accompanying condensed balance sheets.
On August 29, 2023, the Sponsor loaned the Company an aggregate of up to $950,250 to cover expenses related to the Company’s initial business combination pursuant to a promissory note (the “Second Note”). The Second Note is noninterest bearing and payable on the earliest of: (i) the consummation of the Company’s initial business combination unless converted into working capital warrants at the option of the Sponsor, at a price of $0.75 per warrant, as described in the registration statement that the Company filed in connection with the initial public offering of its securities, (ii) August 17, 2024, and (iii) the liquidation of the Company. Such working capital warrants would be identical to the private placement warrants issued to the Sponsor in a private placement in connection with the Company’s initial public offering. As of March 31, 2024 and December 31, 2023, the fair value of the Second Note was $950,250.
 
 
Service and Administrative Fees
On August 12, 2021, the Company entered into an agreement with DEHC LLC, an affiliate of the Company’s Chief Financial Officer, pursuant to which the Company agreed to pay for service and administrative fees of $20,000 per month for 18 months (or until February 12, 2023). On August 29, 2023, the agreement was amended to extend the services for the period from August 17, 2023 to August 17, 2024 with the same monthly payment. For the three months ended March 31, 2024 and 2023, the Company incurred $60,000 and $20,000, respectively, for such expenses, included as general and administrative expenses-related party on the condensed statements of operations contained herein. As of March 31, 2024 and December 31, 2023, the Company had no outstanding balance for services in connection with such agreement.
The Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any
out-of-pocket
expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The Company’s audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, officers, directors or their affiliates.
Non-Redemption
Agreements
On August 11, 2023 and August 14, 2023, the Company entered into
Non-Redemption
Agreements with various unaffiliated third parties pursuant to which these shareholders have committed not to redeem 2,600,000 of their Class A ordinary shares at the Extraordinary General Meeting held on August 15, 2023. In consideration of this agreement, the Sponsor has agreed to transfer 568,750 of its Class B ordinary shares to such investors at the closing of the Business Combination. The Company estimated the aggregate fair value of the Sponsor shares attributable to the
Non-Redemption
Agreements to be $0.6 million or $0.97 per share. The excess of the fair value of the Sponsor shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. The Company accounted for the transfer of the Sponsor’s shares to
non-redeeming
shareholders as a capital contribution by the Sponsor with a corresponding charge to additional
paid-in
capital to recognize the fair value of the shares transferred.
The fair value of the Sponsor shares was based on the following significant inputs:
 
    
August 15, 2023
  
Risk-free interest rate
      5.36 % 
Remaining life of SPAC
      0.62  
Underlying stock price
    $ 10.00  
Probability of transaction
      10 % 
v3.24.1.1.u2
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
NOTE 5. COMMITMENTS AND CONTINGENCIES
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares are entitled to registration rights pursuant to a registration rights agreement signed upon the consummation of the Initial Public Offering. These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriters a
45-day
option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,600,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price, less underwriting discounts and commissions. The underwriters fully exercised the over-allotment on August 17, 2021.
 
 
The underwriters were entitled to an underwriting discount of $0.20 per unit, or approximately $5.5 million in the aggregate, paid upon the closing of the Initial Public Offering. $0.35 per unit, or approximately $9.7 million in the aggregate will be payable to the underwriters for deferred underwriting commissions. 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.
Contingent Fee Arrangement
On August 3, 2023, the Company entered into an arrangement with J.V.B Financial Group, acting through its Cohen & Company Capital Markets division (“CCM”) to obtain capital market advisory services and to act as the Company’s placement agent in connection with raising capital with a specific target in its search for a Business Combination with an unaffiliated third party (“Target”). CCM would be entitled to an advisor fee of $2.0 million and a transaction fee of an amount equal to 5% of the sum of the gross proceeds raised from investors and received by the Company and Target plus proceeds released from the Trust Account without restriction with respect to any of the Class A ordinary shares that did not redeem such shares in connection with the Extension or the Business Combination (“Arrangement”). The Company may pay CCM a discretionary fee of $1.0 million if the Company determines in its sole discretion that the performance of CCM warrants such additional fee. Per the Arrangement, the fees for these services are contingent upon the closing of a Business Combination and therefore not included as liabilities on the accompanying condensed balance sheets. Under the Arrangement, the Company will also reimburse CCM for reasonable expenses. As of March 31, 2024 and December 31, 2023, no expenses have been claimed.
v3.24.1.1.u2
Class A Ordinary Shares Subject to Possible Redemption
 3 Months Ended
Mar. 31, 2024
Temporary Equity Disclosure [Abstract]  
Class A Ordinary Shares Subject to Possible Redemption
NOTE 6. CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION
The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of future events. The Company is authorized to issue 100,000,000 Class A ordinary shares with a par value of $0.0001 per share. Holders of the Company’s Class A ordinary shares are entitled to one vote for each share. On August 15, 2023, holders of 23,057,267 Class A ordinary shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.67 per share, for an aggregate redemption amount of approximately $246.0 million. As of March 31, 2024 and December 31, 2023, there were 4,542,733 Class A ordinary shares outstanding, all of which were subject to possible redemption.
The Class A ordinary shares subject to possible redemption reflected on the condensed balance sheets are reconciled in the following table:
 
Class A ordinary shares subject to possible redemption, December 31, 2022
    $ 282,942,286  
Extension payment made by the Sponsor
      2,760,000
Redemption of Class A ordinary shares subject to possible redemption
      (245,963,349 ) 
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      9,377,784  
  
 
 
  
Class A ordinary shares subject to possible redemption, December 31, 2023
      49,116,721  
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      866,895  
  
 
 
  
Class A ordinary shares subject to possible redemption, March 31, 2024
    $ 49,983,616  
  
 
 
  
v3.24.1.1.u2
Shareholder's Deficit
 3 Months Ended
Mar. 31, 2024
Stockholders' Equity Note [Abstract]  
Shareholder's Deficit
NOTE 7. SHAREHOLDERS’ DEFICIT
Preference Shares-
The Company is authorized to issue 1,000,000 preference shares, par value $0.0001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2024 and December 31, 2023, there were no preference shares issued or outstanding.
Class
 A Ordinary Shares-
The Company is authorized to issue 100,000,000 Class A ordinary shares with a par value of $0.0001 per share. As of March 31, 2024 and December 31, 2023, there were 4,542,733 Class A ordinary shares issued and outstanding, which were all subject to possible redemption and have been classified as temporary equity (see Note 6).
 
 
Class
 B Ordinary Shares-
The Company is authorized to issue 10,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of March 31, 2024 and December 31, 2023, there were 6,900,000 Class B ordinary shares issued and outstanding, which amounts have been adjusted to reflect the shares surrendered as discussed in Note 4.
Shareholders of record are entitled to one vote for each share held on all matters to be voted on by shareholders; provided that, prior to the completion of the initial Business Combination, holders of the Class B ordinary shares will have the right to elect all of the Company’s directors and remove members of the Company’s board of directors for any reason. Prior to the completion of the initial Business Combination, only holders of the Class B ordinary shares will have the right to vote on the Company’s appointment of directors.
Holders of the Public Shares will not be entitled to vote on the Company’s appointment of directors during such time. In addition, prior to the completion of the initial Business Combination, holders of a majority of the outstanding Class B ordinary shares may remove a member of the Company’s board of directors for any reason. These provisions of the Memorandum and Articles may only be amended by a resolution passed by at least
two-thirds
(2/3) of all holders (which must include a simple majority of the holders of Class B ordinary shares). With respect to any other matter submitted to a vote of the Company’s shareholders, including any vote in connection with the initial Business Combination, holders of the Class A ordinary shares and holders of the Class B ordinary shares will vote together as a single class on all matters submitted to a vote of the Company’s shareholders, except as required by law.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holders, on a
one-for-one
basis, subject to adjustment for share
sub-divisions,
share capitalizations, reorganizations, recapitalizations and the like, and subject to further adjustment as described herein.
In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Proposed Offering and related to the closing of the initial Business Combination, including pursuant to a specified future issuance, the ratio at which Class B ordinary shares shall convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the then-outstanding Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance, including a specified future issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an
as-converted
basis, 20% of the sum of the total number of all ordinary shares outstanding upon the completion of the Initial Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity-linked securities issued or issuable to any seller in the initial Business Combination).
v3.24.1.1.u2
Derivative Warrant Liabilities
 3 Months Ended
Mar. 31, 2024
Derivative Warrant Liabilities Disclosure [Abstract]  
Derivative Warrant Liabilities
NOTE 8. DERIVATIVE WARRANT LIABILITIES
As of March 31, 2024 and December 31, 2023, the Company had 20,700,000 Public Warrants and 18,720,000 Private Placement Warrants outstanding.
Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the Units and only whole Public Warrants will trade. The Public Warrants will become exercisable 30 days after the completion of a Business Combination; provided that the Company has an effective registration statement under the Securities Act covering the issuance of the Class A ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Public Warrants on a cashless basis under the circumstances specified in the warrant agreement). The Company agreed that as soon as practicable, but in no event later than 20 business days, after the closing of the initial Business Combination, the Company will use its commercially reasonable efforts to file, and within 60 business days following the initial Business Combination to have declared effective, a post-effective amendment to the registration statement of which this Report forms a part or a new registration statement covering the issuance of the Class A ordinary shares issuable upon exercise of the warrants and to maintain a current prospectus relating to those Class A ordinary shares until the warrants expire or are redeemed; provided, that if the Class A ordinary shares are at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its
option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, it will not be required to file or maintain in effect a registration statement, but it will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation.
The warrants will have an exercise price of $11.50 per share, subject to adjustments. In addition, if (x) the Company issues additional shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per share (as adjusted for share
sub-divisions,
share capitalizations, rights issuances, subdivisions, reorganizations, recapitalizations and the like) (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the Sponsor, initial shareholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the Initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of each warrant will be adjusted (to the nearest cent) such that the effective exercise price per full share will be equal to 115% of the higher of (i) the Market Value and (ii) the Newly Issued Price, and the $18.00 per share redemption trigger price described below will be adjusted (to the nearest cent) to be equal to 180% of the higher of (i) the Market Value and (ii) the Newly Issued Price.
The Private Placement Warrants are identical to the Public Warrants, except that (1) the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants are not transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, (2) the Private Placement Warrants are
non-redeemable,
(3) the Private Placement Warrants may be exercised by the holders on a cashless basis and (4) the holders of the Private Placement Warrants (including with respect to the ordinary shares issuable upon exercise of the Private Placement Warrants) are entitled to registration rights.
Redemption of warrants for cash when the price per Class A ordinary share equals or exceeds $18.00:
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except for the Private Placement Warrants)
 
  •  
in whole and not in part;
 
  •  
at a price of $0.01 per warrant;
 
  •  
upon a minimum of 30 days’ prior written notice of redemption; and
 
  •  
if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within the
30-trading
day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders.
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.
v3.24.1.1.u2
Fair Value Measurements
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
NOTE 9. FAIR VALUE MEASUREMENTS
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:
March 31, 2024
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
      
Investments held in Trust Account-Money Market Funds
(1)
    $ 50,082,964      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 1,242,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $        $ 1,123,200  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
December 31, 2023
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
         
Investments held in Trust Account-Money Market Funds
(1)
    $ 49,216,069      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 2,070,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $ —       $ 1,872,000  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
 
(1)
Excludes $652 of cash balance held within the Trust Account as of March 31, 2024 and December 31, 2023.
Transfers to/from Levels 1, 2, and 3 are recognized at the beginning of the reporting period. There were no transfers to/from Levels 1, 2, and 3 during the three months ended March 31, 2024 or 2023.
Level 1 assets include investments in U.S. government securities. The Company uses inputs such as actual trade data, quoted market prices from dealers or brokers, and other similar sources to determine the fair value of its investments.
The Public Warrants were valued using an observable market quote in an active market as of March 31, 2024 and December 31, 2023. As of March 31, 2024, the estimated fair value of the Private Placement Warrants and Working Capital Loans were based on the observable fair value of the Public Warrants as of March 31, 2024. As of December 31, 2023, the estimated fair value of the Private Placement Warrants and Working Capital Loan is determined using Black-Scholes option pricing model. For the three months ended March 31, 2024 and 2023, the Company recognized
a non-operating gain
from the change in fair value of derivative warrant liabilities of approximately $1.6 million and a
non-operating
loss of $3.2 million, respectively, and no change in fair value of the working capital loan in the accompanying unaudited condensed statements of operations.
The change in the valuation technique used to determine the fair value of the Private Placement Warrants and Working Capital loans was due to the limited market activity. The Company determined the fair value of each Private Warrant was consistent with that of a Public Warrant. For the fair value of the Working Capital Loans, the Company also relied on the fair value of the Public Warrants, as the warrants that would be converted from the Working Capital Loan would be identical to the Private Placement Warrants.
As of December 31, 2023 the estimated fair value of the Private Placement Warrants and Working Capital Loan was determined using Level 3 inputs. Inherent in a Black-Scholes option pricing model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate, and dividend yield. The Company estimates the volatility of its warrants based on implied volatility from the Company’s traded warrants and from historical volatility of select
peer companies’ ordinary shares that match the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following table provides quantitative information regarding Level 3 fair value measurements input for Private Placement Warrants, and Working Capital Loan at their measurement dates:
 
    
As of
December 31,
2023
  
Exercise price
    $ 11.50  
Stock price
    $ 10.69  
Volatility
      5.2 % 
Term (years)
      5.58  
Risk-free rate
      3.78 % 
Dividend yield
      0.00 % 
(Note: To determine the fair value of the Working Capital Loans, the Company relied on the inputs of the Private Placement Warrants, as the warrants that would be converted from the Working Capital Loan would be identical to the Private Placement Warrants.)
The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Derivative warrant liabilities as of December 31, 2022
    $ 2,556,800  
Issuance of Additional Private Placement Warrants
      552,000  
Change in fair value of derivative warrant liabilities
      (1,236,800 ) 
  
 
 
  
Derivative warrant liabilities as of December 31, 2023
      1,872,000  
Change in fair value of derivative warrant liabilities
      (748,800 ) 
  
 
 
  
Derivative warrant liabilities as of March 31, 2024 (unaudited)
    $ 1,123,200  
  
 
 
  
The change in the fair value of the Working Capital Loan-related party, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Working Capital Loan - related party as of December 31, 2022
    $ 150,000  
Additional Working Capital Loan - related party
      950,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of December 31, 2023
    $ 1,100,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of March 31, 2024 (unaudited)
    $ 1,100,250  
  
 
 
  
v3.24.1.1.u2
Subsequent Events
 3 Months Ended
Mar. 31, 2024
Subsequent Events [Abstract]  
Subsequent Events
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred up to the date unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment to or disclosure in the unaudited condensed financial statements.
v3.24.1.1.u2
Basis of Presentation and Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Basis of presentation
Basis of Presentation
The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and Article 8 of Regulation
S-X.
Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 or any future period.
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form
10-K
(the “Form
10-K”)
for the year ended December 31, 2023, as filed with the SEC on March 29, 2024, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2023, is derived from the audited financial statements presented in the Form
10-K.
Use of estimates
Use of Estimates
The preparation of unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of income and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and cash equivalents
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents as of March 31, 2024 and December 31, 2023.
Investments Held in Trust Account
Investments Held in Trust Account
The Company’s portfolio of investments is comprised of U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or investments in money market funds that invest in U.S. government securities and generally have a readily determinable fair value, or a combination thereof. When the Company’s investments held in the Trust Account are comprised of U.S. government securities, the investments are classified as trading securities. When the Company’s investments held in the Trust Account are comprised of money market funds, the investments are recognized at fair value. Trading securities and investments in money market funds are presented on the condensed balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of these securities is included in income on investments held in the Trust Account in the accompanying condensed statements of operations. The estimated fair values of investments held in the Trust Account are determined using available market information.
Concentration of credit risk
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of March 31, 2024 and December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.
Fair value of financial instruments
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities which qualify as financial instruments under the FASB ASC Topic 820, “Fair Value Measurements,” equal or approximate the carrying amounts represented in the unaudited condensed balance sheets.
Fair Value Measurements
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of:
 
  •  
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
 
  •  
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
 
  •  
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC
815-15.
The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
The 20,700,000 warrants issued in connection with the Initial Public Offering (the “Public Warrants”) and the 18,720,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC
815-40.
Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed statements of operations. The fair value of the Public Warrants issued in connection with the Public Offering were initially estimated using a Monte Carlo simulation model. For periods where no observable traded price is available, the fair value continues to be estimated using a Monte Carlo simulation. The fair value of the Private Placement Warrants is determined using
 
Black-Scholes option pricing model. The determination of the fair value of the warrant liability may be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative warrant liabilities are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Working Capital Loan-Related Party
Working Capital Loans-Related Party
The Company has elected the fair value option to account for its Working Capital Loans with its Sponsor as defined and more fully described in Note 4. As a result of applying the fair value option, the Company records the loans fair value with a gain or loss recognized at issuance, and subsequent changes in fair value are recorded as change in the fair value of Working Capital Loans reported in the condensed statements of operations. The fair value is based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s and, if applicable, an independent third-party valuation firm’s own assumption about the assumptions a market participant would use in pricing the asset or liability.
Offering costs associated with Initial Public Offering
Offering Costs Associated with Initial Public Offering
Offering costs consisted of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that were directly related to the Initial Public Offering. Offering costs were allocated to the separable financial instruments issued in the Initial Public Offering based on a relative fair value basis, compared to total proceeds received. Offering costs associated with derivative warrant liabilities were expensed as incurred and presented as
non-operating
expenses in the condensed statements of operations. Offering costs associated with the Class A ordinary shares were charged against the carrying value of Class A ordinary shares subject to possible redemption upon the completion of the Initial Public Offering. The Company classifies deferred underwriting commissions as
non-current
liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.
Class A Ordinary Shares Subject to Possible Redemption
Class A Ordinary Shares Subject to Possible Redemption
The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480. Class A ordinary shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A 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) is classified as temporary equity. At all other times, Class A ordinary shares are classified as shareholders’ equity. The Company’s Class A 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, 4,542,733 Class A ordinary shares subject to possible redemption are presented as temporary equity, outside of the shareholders’ deficit section of the Company’s condensed balance sheets as of March 31, 2024 and December 31, 2023.
Effective with the closing of the Initial Public Offering, the Company recognized the remeasurement from initial book value to redemption amount, which resulted in charges against additional
paid-in
capital (to the extent available) and accumulated deficit.
Net Income per Ordinary Share
Net Income (Loss) per Ordinary Share
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company has 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 (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares of ordinary shares outstanding for the respective period.
The calculation of diluted net income (loss) does not consider the effect of the warrants underlying the Units sold in the Initial Public Offering (including the consummation of the over-allotment) and the Private Placement Warrants to purchase an aggregate of 39,420,000 Class A ordinary shares, or the effects of the 1,467,000 shares underlying the warrants that would be issuable upon conversion of the Working Capital Loans (as defined in Note 4) in the calculation
 
of diluted income (loss) per share, because their exercise is contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. The Company has considered the effect of Class B ordinary shares that were excluded from the weighted average number of basic shares outstanding as they were contingent on the exercise of over-allotment option by the underwriters. Since the contingency was satisfied, the Company has included these shares in the weighted average number as of the beginning of the period to determine the dilutive impact of these shares. Remeasurement of the redeemable Class A ordinary shares is excluded from net income per share as the
redemption
value approximates fair value.
The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
 
    
For the
Three Months Ended
March 31, 2024
     
For the
Three Months Ended
March 31, 2023
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and Diluted net income (loss) per ordinary share:
            
Numerator:
            
Allocation of net income (loss)
    $ 856,504      $ 1,300,952      $ (1,230,169 )     $ (307,542 ) 
Denominator:
            
Basic and Diluted weighted average ordinary shares outstanding
      4,542,733        6,900,000        27,600,000        6,900,000  
  
 
 
     
 
 
     
 
 
     
 
 
  
Basic and Diluted net income (loss) per ordinary share
    $ 0.19      $ 0.19      $ (0.04 )     $ (0.04 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
Income taxes
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets were deemed de minimis as of March 31, 2024 and December 31, 2023 and a full valuation allowance was recorded against such deferred tax assets.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2024 and December 31, 2023. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31, 2024 and December 31, 2023.
The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Recent accounting pronouncements
Recent Accounting Pronouncements
In June 2022, the FASB issued ASU
2022-03,
ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The ASU amends ASC 820 to clarify that a contractual sales restriction is not considered in measuring an equity security at fair value and to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value. The ASU applies to both holders and issuers of equity and equity-linked securities measured at fair value. The amendments in this ASU are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this pronouncement on the condensed financial statements.
The Company’s 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 accompanying unaudited condensed financial statements.
v3.24.1.1.u2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
 3 Months Ended
Mar. 31, 2024
Accounting Policies [Abstract]  
Summary of basic and diluted net income (loss) per common share
The following table presents a reconciliation of the numerator and denominator used to compute basic and diluted net income (loss) per share for each class of ordinary shares:
 
    
For the
Three Months Ended
March 31, 2024
     
For the
Three Months Ended
March 31, 2023
  
    
Class A
     
Class B
     
Class A
     
Class B
  
Basic and Diluted net income (loss) per ordinary share:
            
Numerator:
            
Allocation of net income (loss)
    $ 856,504      $ 1,300,952      $ (1,230,169 )     $ (307,542 ) 
Denominator:
            
Basic and Diluted weighted average ordinary shares outstanding
      4,542,733        6,900,000        27,600,000        6,900,000  
  
 
 
     
 
 
     
 
 
     
 
 
  
Basic and Diluted net income (loss) per ordinary share
    $ 0.19      $ 0.19      $ (0.04 )     $ (0.04 ) 
  
 
 
     
 
 
     
 
 
     
 
 
  
v3.24.1.1.u2
Related Party Transactions (Tables)
 3 Months Ended
Mar. 31, 2024
Related Party Transactions [Abstract]  
Summary of Significant Inputs Used in the Valuation of Fair Value of the Sponsor Shares
The fair value of the Sponsor shares was based on the following significant inputs:
 
    
August 15, 2023
  
Risk-free interest rate
      5.36 % 
Remaining life of SPAC
      0.62  
Underlying stock price
    $ 10.00  
Probability of transaction
      10 % 
v3.24.1.1.u2
Class A Ordinary Shares Subject to Possible Redemption (Tables)
 3 Months Ended
Mar. 31, 2024
Temporary Equity Disclosure [Abstract]  
Summary of Class A Common Stock Subject to Possible Redemption
The Class A ordinary shares subject to possible redemption reflected on the condensed balance sheets are reconciled in the following table:
 
Class A ordinary shares subject to possible redemption, December 31, 2022
    $ 282,942,286  
Extension payment made by the Sponsor
      2,760,000
Redemption of Class A ordinary shares subject to possible redemption
      (245,963,349 ) 
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      9,377,784  
  
 
 
  
Class A ordinary shares subject to possible redemption, December 31, 2023
      49,116,721  
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption
      866,895  
  
 
 
  
Class A ordinary shares subject to possible redemption, March 31, 2024
    $ 49,983,616  
  
 
 
  
v3.24.1.1.u2
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2024
Fair Value Disclosures [Abstract]  
Summary of assets and liabilities that are measured at fair value on a recurring basis
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value:
March 31, 2024
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
      
Investments held in Trust Account-Money Market Funds
(1)
    $ 50,082,964      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 1,242,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $        $ 1,123,200  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
December 31, 2023
 
Description
   
Quoted
Prices in
Active
Markets
(Level 1)
     
Significant
Other
Observable
Inputs
(Level 2)
     
Significant
Other
Unobservable
Inputs
(Level 3)
  
Assets:
         
Investments held in Trust Account-Money Market Funds
(1)
    $ 49,216,069      $ —       $ —   
Liabilities:
         
Derivative Warrant Liabilities
-Public Warrants
    $ 2,070,000      $ —       $ —   
Derivative Warrant Liabilities-Private Warrants
    $ —       $ —       $ 1,872,000  
Working Capital Loan - Related Party
    $ —       $ —       $ 1,100,250  
 
(1)
Excludes $652 of cash balance held within the Trust Account as of March 31, 2024 and December 31, 2023.
Summary of quantitative information regarding Level 3 fair value measurements input
The following table provides quantitative information regarding Level 3 fair value measurements input for Private Placement Warrants, and Working Capital Loan at their measurement dates:
 
    
As of
December 31,
2023
  
Exercise price
    $ 11.50  
Stock price
    $ 10.69  
Volatility
      5.2 % 
Term (years)
      5.58  
Risk-free rate
      3.78 % 
Dividend yield
      0.00 % 
Summary of fair value of the derivative liabilities, measured using Level 3 inputs
The change in the fair value of the derivative warrant liabilities, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Derivative warrant liabilities as of December 31, 2022
    $ 2,556,800  
Issuance of Additional Private Placement Warrants
      552,000  
Change in fair value of derivative warrant liabilities
      (1,236,800 ) 
  
 
 
  
Derivative warrant liabilities as of December 31, 2023
      1,872,000  
Change in fair value of derivative warrant liabilities
      (748,800 ) 
  
 
 
  
Derivative warrant liabilities as of March 31, 2024 (unaudited)
    $ 1,123,200  
  
 
 
  
Summary of change in the fair value of the Working Capital Loan – related party, measured using Level 3 inputs
The change in the fair value of the Working Capital Loan-related party, measured using Level 3 inputs, for the period from December 31, 2022 through March 31, 2024, is summarized as follows:
 
Working Capital Loan - related party as of December 31, 2022
    $ 150,000  
Additional Working Capital Loan - related party
      950,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of December 31, 2023
    $ 1,100,250  
Change in fair value of Working Capital Loan - related party
      —   
  
 
 
  
Working Capital Loan - related party as of March 31, 2024 (unaudited)
    $ 1,100,250  
  
 
 
  
v3.24.1.1.u2
Description of Organization and Business Operations - Additional Information (Detail) - USD ($)
 3 Months Ended
Aug. 15, 2023
Aug. 14, 2023
Aug. 11, 2023
Feb. 15, 2023
Aug. 17, 2022
Aug. 04, 2022
Aug. 17, 2021
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Aug. 29, 2023
Mar. 31, 2021
Mar. 24, 2021
Entity incorporation, date of incorporation               Mar. 19, 2021          
Deferred underwriting commissions               $ 9,660,000   $ 9,660,000      
Proceeds From Issuance Of Warrants               0 $ 2,760,000        
Payment to acquire restricted investments               $ 0 $ 2,760,000        
Restricted investments term         185 days                
Percentage of redeeming shares of public shares without the company's prior written consent               15.00%          
Percentage of public shares to be redeemed on non completion of business combination               100.00%          
Redemption of public shares after closing of IPO date               Aug. 17, 2023          
Cash               $ 1,120,360   1,222,918      
Working capital (deficit)               $ 2,300,000          
Period within which initial business combination shall be consummated from the closing of initial public offering               12 months          
Anticipated period within which initial business combination shall not be able to consummate               12 months          
Extended each by additional period within which initial business combination shall be consummate with the option of sponsor               6 months          
Extended total additional period within which initial business combination shall be consummate with the option of sponsor               12 months          
Per share value of residual assets remaining available for distribution               $ 10          
Working Capital Loan - related party               $ 1,100,250   1,100,250      
Second Promissory Note [Member]                          
Debt fair value               $ 950,250   950,250      
Post Business Combination Target Company [Member]                          
Business acquisition, percentage of voting interests acquired               50.00%          
Working Capital Loan [Member]                          
Debt instrument amount               $ 2,000,000          
Debt instrument, convertible, conversion price               $ 0.75          
Minimum [Member]                          
Percentage of fair market value of target business to asset held in trust account               80.00%          
Net tangible assets required for consummation of business combination               $ 5,000,001          
Per share amount to be maintained in the trust account               $ 10          
Maximum [Member]                          
Per share amount to be maintained in the trust account               $ 10          
Private Placement Warrants [Member]                          
Stock issued during period shares             18,720,000            
Sponsor [Member]                          
Debt instrument, face amount                         $ 300,000
Sponsor [Member] | Second Promissory Note [Member]                          
Debt instrument, face amount                     $ 950,250    
Sponsor [Member] | Working Capital Loan [Member]                          
Debt instrument amount             $ 150,000            
Working Capital Loan - related party               $ 150,000   $ 150,000      
Sponsor [Member] | Working Capital Loan [Member] | Second Promissory Note [Member]                          
Debt instrument, convertible, conversion price                     $ 0.75    
Sponsor [Member] | Extend Period of Time for Business Combination [Member]                          
Deposit amount per each unit               $ 0.1          
Sponsor [Member] | Founder Shares [Member]                          
Proceeds from Issuance of Common Stock               $ 25,000          
Sponsor [Member] | Private Placement Warrants [Member]                          
Class of warrant or right, issued during the period       3,680,000   3,680,000 11,360,000            
Class of warrant or right, issue price       $ 0.75   $ 0.75 $ 0.75            
Proceeds From Issuance Of Warrants       $ 5,520,000   $ 5,520,000 $ 8,500,000            
Class Of Warrants Or Rights Issued During The Period       3,680,000   3,680,000              
Sponsor [Member] | Private Placement Warrants [Member] | Extend Period of Time for Business Combination [Member]                          
Class of warrant or right, issued during the period               3,680,000          
Class of warrant or right, issue price               $ 0.75          
Proceeds From Issuance Of Warrants               $ 2,800,000          
IPO [Member]                          
Payment to acquire restricted investments             $ 276,000,000            
Share price             $ 10            
Class A ordinary shares [Member]                          
Stock issued during period shares             3,600,000            
Common Stock par value               $ 0.0001   $ 0.0001      
Class A ordinary shares [Member] | Common Stock [Member] | Non Redemption Agreements [Member]                          
Stock issued during period shares   2,600,000 2,600,000                    
Shares redemeed, Shares 23,057,267                        
Redemption price per share $ 10.67                        
Shares redemeed, Value $ 246,000,000                        
Class A ordinary shares [Member] | IPO [Member]                          
Stock issued during period shares             27,600,000            
Shares issued price per share             $ 10            
Proceeds from issuance of IPO             $ 276,000,000            
Stock issuance costs             15,700,000            
Deferred underwriting commissions             9,700,000            
Offering costs allocated to derivative warrant liabilities             $ 889,000            
Class B ordinary shares [Member]                          
Common Stock par value               $ 0.0001   $ 0.0001      
Class B ordinary shares [Member] | Common Stock [Member] | Non Redemption Agreements [Member]                          
Share price $ 0.97                        
Aggregate common shares held by sponsor 568,750                        
Aggregate common shares held by sponsor, Value $ 600,000                        
Class B ordinary shares [Member] | Sponsor [Member]                          
Common Stock par value                       $ 0.0001  
v3.24.1.1.u2
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)
 3 Months Ended
Aug. 17, 2021
Mar. 31, 2024
Dec. 31, 2023
Class of Warrant or Right [Line Items]      
FDIC insured amount   $ 250,000  
Cash equivalents   0 $ 0
Unrecognized tax benefits   0 0
Accrued for interest and penalties   $ 0 $ 0
Term of restricted investments   185 days  
Public Warrants [Member]      
Class of Warrant or Right [Line Items]      
Stock issued during period shares 20,700,000    
Private Placement Warrants [Member]      
Class of Warrant or Right [Line Items]      
Stock issued during period shares 18,720,000    
Class A ordinary shares [Member]      
Class of Warrant or Right [Line Items]      
Number of common stock into which the class of warrant or right may be converted   39,420,000  
Temporary equity shares issued   4,542,733 4,542,733
Stock issued during period shares 3,600,000    
Convertible Common Stock [Member]      
Class of Warrant or Right [Line Items]      
Number of common stock into which the class of warrant or right may be converted   1,467,000  
v3.24.1.1.u2
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Basic and Diluted Net Income (Loss) Per Common Share (Detail) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Numerator:    
Allocation of net income $ 2,157,456 $ (1,537,711)
Common Class A [Member]    
Numerator:    
Allocation of net income $ 856,504 $ (1,230,169)
Denominator:    
Weighted Average Number of Shares Outstanding, Basic 4,542,733 27,600,000
Weighted Average Number of Shares Outstanding, Diluted 4,542,733 27,600,000
Basic net income per ordinary share $ 0.19 $ (0.04)
Diluted net income per ordinary share $ 0.19 $ (0.04)
Common Class B [Member]    
Numerator:    
Allocation of net income $ 1,300,952 $ (307,542)
Denominator:    
Weighted Average Number of Shares Outstanding, Basic 6,900,000 6,900,000
Weighted Average Number of Shares Outstanding, Diluted 6,900,000 6,900,000
Basic net income per ordinary share $ 0.19 $ (0.04)
Diluted net income per ordinary share $ 0.19 $ (0.04)
v3.24.1.1.u2
Initial Public Offering - Additional Information (Detail) - USD ($)
 3 Months Ended
Aug. 17, 2021
Mar. 31, 2024
Dec. 31, 2023
Deferred underwriting commissions noncurrent   $ 9,660,000 $ 9,660,000
Stock conversion basis   one-for-one basis  
Public Warrants [Member]      
Stock issued during period shares 20,700,000    
Common Class A [Member]      
Stock issued during period shares 3,600,000    
Stock conversion basis Each Unit consists of one Class A ordinary share (such shares included in the Units being offered, the “Public Shares”), and three-fourths of one redeemable warrant (each, a “Public Warrant”).    
Common Class A [Member] | Public Warrants [Member]      
Class of warrant or right, Number of securities called by each warrant or right 1    
Class of warrant or right, Exercise price of warrants or rights $ 11.5    
IPO [Member] | Common Class A [Member]      
Stock issued during period shares 27,600,000    
Shares issued price per share $ 10    
Proceeds from issuance initial public offering $ 276,000,000    
Stock issuance costs 15,700,000    
Deferred underwriting commissions noncurrent 9,700,000    
Offering costs allocated to derivate warrant liabilities $ 889,000    
Over-Allotment Option [Member] | Common Class A [Member]      
Stock issued during period shares 3,600,000    
v3.24.1.1.u2
Related Party Transactions - Additional Information (Detail) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Aug. 17, 2023
Aug. 15, 2023
Aug. 14, 2023
Aug. 11, 2023
Feb. 15, 2023
Aug. 04, 2022
Aug. 17, 2021
Aug. 12, 2021
Aug. 06, 2021
Mar. 31, 2021
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2021
Dec. 31, 2023
Aug. 29, 2023
Mar. 24, 2021
Related Party Transaction [Line Items]                                
Founder Shares, Lock in period                     1 year          
Proceeds from issuance of warrants                     $ 0 $ 2,760,000        
Bank Overdrafts                     150,000          
Administrative expenses—related party                     60,000 $ 20,000        
Working Capital Loan - related party                     1,100,250     $ 1,100,250    
Second Promissory Note [Member]                                
Related Party Transaction [Line Items]                                
Debt fair value                     950,250     950,250    
Working Capital Loan [Member]                                
Related Party Transaction [Line Items]                                
Debt instrument, convertible, carrying amount of equity component                     $ 2,000,000          
Debt instrument, convertible, conversion price                     $ 0.75          
Administrative Service Fee [Member]                                
Related Party Transaction [Line Items]                                
Administrative expenses—related party                     $ 60,000     20,000    
Private Placement Warrants [Member]                                
Related Party Transaction [Line Items]                                
Stock issued during period shares             18,720,000                  
Sponsor [Member]                                
Related Party Transaction [Line Items]                                
Debt instrument, face amount                               $ 300,000
Notes payable current                     150,000          
Sponsor [Member] | Second Promissory Note [Member]                                
Related Party Transaction [Line Items]                                
Debt instrument, face amount                             $ 950,250  
Sponsor [Member] | Working Capital Loan [Member]                                
Related Party Transaction [Line Items]                                
Debt instrument, convertible, carrying amount of equity component             $ 150,000                  
Working Capital Loan - related party                     $ 150,000     150,000    
Sponsor [Member] | Working Capital Loan [Member] | Second Promissory Note [Member]                                
Related Party Transaction [Line Items]                                
Debt instrument, convertible, conversion price                             $ 0.75  
Sponsor [Member] | Private Placement Warrants [Member]                                
Related Party Transaction [Line Items]                                
Class of warrant or right, issued during the period         3,680,000 3,680,000 11,360,000                  
Class of warrant or right, issue price         $ 0.75 $ 0.75 $ 0.75                  
Proceeds from issuance of warrants         $ 5,520,000 $ 5,520,000 $ 8,500,000                  
Lock in period for transfer of warrants from the date Of completion of business combination 30 days                              
Sponsor [Member] | Share Price Equals Or Exceeds Twelve Per USD [Member]                                
Related Party Transaction [Line Items]                                
Share price                     $ 12          
Share transfer restriction, threshold consecutive trading days                         20 days      
Share transfer restriction, threshold trading days                         30 days      
Number of days for a particular event to get over for determining trading period                         150 days      
Chief Executive Officer [Member] | Administrative Service Fee [Member]                                
Related Party Transaction [Line Items]                                
Related party transaction, amounts of transaction               $ 20,000                
Related party transaction settlement period               18 months                
Service And Administrative Fee [Member]                                
Related Party Transaction [Line Items]                                
Outstanding balance for services in connection with such agreement                     $ 0     $ 0    
Class A ordinary shares [Member]                                
Related Party Transaction [Line Items]                                
Common stock, par or stated value per share                     $ 0.0001     $ 0.0001    
Common stock, shares outstanding                     4,542,733     4,542,733    
Common stock, shares issued                     4,542,733     4,542,733    
Stock issued during period shares             3,600,000                  
Class A ordinary shares [Member] | Non-Redemption Agreements [Member] | Common Stock [Member]                                
Related Party Transaction [Line Items]                                
Stock issued during period shares     2,600,000 2,600,000                        
Class A ordinary shares [Member] | Over-Allotment Option [Member]                                
Related Party Transaction [Line Items]                                
Stock issued during period shares             3,600,000                  
Class A ordinary shares [Member] | Sponsor [Member] | Private Placement Warrants [Member]                                
Related Party Transaction [Line Items]                                
Class of warrant or right, Number of securities called by each warrant or right 1                              
Class of warrant or right, Exercise price of warrants or rights $ 11.5                              
Common Class B [Member]                                
Related Party Transaction [Line Items]                                
Common stock, par or stated value per share                     $ 0.0001     $ 0.0001    
Common stock, shares outstanding                     6,900,000     6,900,000    
Common stock, shares issued                     6,900,000     6,900,000    
Common Class B [Member] | Non-Redemption Agreements [Member] | Common Stock [Member]                                
Related Party Transaction [Line Items]                                
Share price   $ 0.97                            
Aggregate common shares held by sponsor   568,750                            
Aggregate common shares held by sponsor, Value   $ 600,000                            
Common Class B [Member] | Sponsor [Member]                                
Related Party Transaction [Line Items]                                
Stock issued during period for services, Value                   $ 25,000            
Stock issued during period for services, Shares                   7,475,000            
Common stock, par or stated value per share                   $ 0.0001            
Stock Repurchased During Period, Shares                 1,006,250              
Stock Repurchased During Period, Value                 $ 0              
Common stock, shares outstanding             900,000                  
Percentage of ownership held by initial shareholders                     20.00%          
Common stock, shares issued               431,250                
Common Class B [Member] | Sponsor [Member] | Over-Allotment Option [Member]                                
Related Party Transaction [Line Items]                                
Common stock, shares outstanding                 6,900,000              
Common Stock, Other Shares, Outstanding                     900,000          
v3.24.1.1.u2
Related Party Transactions - Summary of Significant Inputs Used in the Valuation of Fair Value of the Sponsor Shares (Detail)
Aug. 15, 2023
Risk-free interest rate [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Fair value significant unobservable input entities own equity 5.36
Remaining life of SPAC [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Fair value significant unobservable input entities own equity 0.62
Underlying stock price [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Fair value significant unobservable input entities own equity 10
Probability of transaction [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Fair value significant unobservable input entities own equity 10
v3.24.1.1.u2
Commitments and Contingencies - Additional Information (Detail) - USD ($)
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Aug. 03, 2023
Deferred underwriting discount per unit $ 0.2    
Deferred underwriting discount $ 5,500,000    
Deferred underwriting commission per unit $ 0.35    
Deferred underwriting commissions $ 9,660,000 $ 9,660,000  
Cohen & Company Capital Markets division [Member]      
Advisor fee     $ 2,000,000
Transaction fee     5.00%
Discretionary fee     $ 1,000,000
Other Commitment $ 0 $ 0  
Over-Allotment Option [Member]      
Overallotment option vesting period 45 days    
Common stock shares subscribed but not yet issued 3,600,000    
v3.24.1.1.u2
Class A Ordinary Shares Subject to Possible Redemption - Additional Information (Detail) - Common Class A [Member] - USD ($)
Aug. 15, 2023
Mar. 31, 2024
Dec. 31, 2023
Temporary Equity [Line Items]      
Temporary equity shares authorized   100,000,000  
Temporary equity, par value   $ 0.0001  
Temporary equity shares outstanding   4,542,733 4,542,733
Common Stock [Member] | Non Redemption Agreements [Member]      
Temporary Equity [Line Items]      
Shares redemeed, Shares 23,057,267    
Redemption price per share $ 10.67    
Shares redemeed, Value $ 246,000,000    
v3.24.1.1.u2
Class A Ordinary Shares Subject to Possible Redemption - Summary Of Class A Ordinary Shares Subject To Possible Redemption (Detail) - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Temporary Equity [Line Items]      
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption $ 866,895 $ 5,492,154  
Common Class A [Member]      
Temporary Equity [Line Items]      
Class A ordinary shares subject to possible redemption, Beginning balance 49,116,721 $ 282,942,286 $ 282,942,286
Extension payment made by the Sponsor     2,760,000
Redemption of Class A ordinary shares subject to possible redemption     (245,963,349)
Remeasurement of redemption value of Class A ordinary shares subject to possible redemption 866,895   9,377,784
Class A ordinary shares subject to possible redemption, Ending balance $ 49,983,616   $ 49,116,721
v3.24.1.1.u2
Shareholder's Deficit - Additional Information (Detail) - $ / shares
 3 Months Ended
Aug. 17, 2021
Mar. 31, 2024
Dec. 31, 2023
Preference stock, Par or stated value per share   $ 0.0001 $ 0.0001
Preference stock, Shares authorized   1,000,000 1,000,000
Preference stock, Shares issued   0 0
Preference stock, Shares outstanding   0 0
Common stock, Voting rights   one vote  
Common stock, Conversion basis   one-for-one basis  
Common Class A [Member]      
Common stock, par or stated value per share   $ 0.0001 $ 0.0001
Common stock, shares authorized   100,000,000 100,000,000
Common stock, shares issued   4,542,733 4,542,733
Common stock, shares outstanding   4,542,733 4,542,733
Common stock, Conversion basis Each Unit consists of one Class A ordinary share (such shares included in the Units being offered, the “Public Shares”), and three-fourths of one redeemable warrant (each, a “Public Warrant”).    
Common Class A [Member] | IPO [Member]      
Percentage of common stock outstanding after conversion   20.00%  
Common Class B [Member]      
Common stock, par or stated value per share   $ 0.0001 $ 0.0001
Common stock, shares authorized   10,000,000 10,000,000
Common stock, shares issued   6,900,000 6,900,000
Common stock, shares outstanding   6,900,000 6,900,000
v3.24.1.1.u2
Derivative Warrant Liabilities - Additional Information (Detail) - $ / shares
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Aug. 17, 2021
Number of days after closing of the initial business combination within which the securities shall be filed 20 days    
Number of days following the initial business combination within which securities registration shall be declared effective 60 days    
Percentage of gross proceeds from equity issuance to total equity proceeds 60.00%    
Warrant [Member]      
Exercise price of warrants $ 11.5    
Share Price Less Than Nine Point Twenty Per USD [Member]      
Share price $ 9.2    
Share Price Less Than Nine Point Twenty Per USD [Member] | Warrant [Member]      
Class of warrant or right, Exercise price adjustment percentage 115.00%    
Share Price Equals Or Exceeds Eighteen Per USD [Member] | Warrant [Member]      
Class of warrant or right, Exercise price adjustment percentage 180.00%    
Class A ordinary shares [Member]      
Number of consecutive trading days for determining the share price   30 days  
Number of trading days for determining the share price   20 days  
Number of consecutive trading days determining volume weighted average trading price of shares 20 days    
Class A ordinary shares [Member] | Share Price Below Nine Point Twenty Per USD [Member]      
Volume weighted average trading price of shares $ 9.2    
Share Price Equal or Exceeds Eighteen Rupees per dollar [Member]      
Share price   $ 18  
Share Price Equal or Exceeds Eighteen Rupees per dollar [Member] | Class A ordinary shares [Member]      
Share price 18    
Redemption Trigger Price [Member] | Class A ordinary shares [Member]      
Share price $ 18    
Public Warrants [Member]      
Class of warrants or rights outstanding 20,700,000    
Warrants and rights outstanding, term   5 years  
Class of warrants redemption price per unit   $ 0.01  
Class of warrant or right, Number of days after which warrants or rights become exercisable 30 days    
Minimum notice period to be given to the holders of warrants   30 days  
Public Warrants [Member] | Class A ordinary shares [Member]      
Exercise price of warrants     $ 11.5
Private Placement Warrants [Member]      
Class of warrants or rights outstanding 18,720,000    
Private Placement Warrants [Member] | Class A ordinary shares [Member]      
Lock in period 30 days    
v3.24.1.1.u2
Fair Value Measurements - Additional Information (Detail) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of derivative warrant liabilities $ (1,576,800) $ 3,227,200
Change in fair value of Working Capital Loan—related party 0 0
Derivative Warrant Liabilities [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Change in fair value of derivative warrant liabilities $ 1,600,000 $ 3,200,000
v3.24.1.1.u2
Fair Value Measurements - Summary of Assets and Liabilities at Fair Value on Recurring Basis (Detail) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Assets:    
Investments held in Trust Account $ 50,083,616 $ 49,216,721
Liabilities:    
Working Capital Loan -current related party $ 1,100,250 $ 1,100,250
Derivative Liability, Statement of Financial Position [Extensible Enumeration] Derivative Liability, Noncurrent Derivative Liability, Noncurrent
Level 1 [Member] | Fair Value, Recurring [Member] | US Treasury Securities [Member]    
Assets:    
Investments held in Trust Account $ 50,082,964 $ 49,216,069
Level 1 [Member] | Public Warrants [Member] | Fair Value, Recurring [Member]    
Liabilities:    
Derivative warrant liabilities 1,242,000 2,070,000
Level 3 [Member] | Fair Value, Recurring [Member]    
Liabilities:    
Working Capital Loan -current related party 1,100,250 1,100,250
Level 3 [Member] | Public Warrants [Member] | Fair Value, Recurring [Member]    
Liabilities:    
Derivative warrant liabilities 0 0
Level 3 [Member] | Private Placement Warrants [Member] | Fair Value, Recurring [Member]    
Liabilities:    
Derivative warrant liabilities $ 1,123,200 $ 1,872,000
v3.24.1.1.u2
Fair Value Measurements - Summary of Assets and Liabilities at Fair Value on Recurring Basis (Parenthetical) (Detail) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Investments held in Trust Account $ 50,083,616 $ 49,216,721
Cash [Member]    
Investments held in Trust Account $ 652 $ 652
v3.24.1.1.u2
Fair Value Measurements - Summary of Quantitative Information Regarding Level 3 Fair Value Measurements Inputs (Detail) - Level 3 [Member]
Dec. 31, 2023
yr
Exercise price [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 11.5
Stock price [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 10.69
Volatility [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 5.2
Term (years) [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 5.58
Risk-free rate [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 0.0378
Dividend yield [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Significant Unobservable Input Liabilities 0
v3.24.1.1.u2
Fair Value Measurements - Summary of change in the fair value of the derivative liabilities measured using Level 3 inputs (Detail) - Derivative Warrant Liabilities [Member] - Level 3 [Member] - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Derivative warrant liabilities $ 1,872,000 $ 2,556,800
Issuance of Public and Private Placement Warrants   552,000
Change in fair value of derivative warrant liabilities (748,800) (1,236,800)
Derivative warrant liabilities $ 1,123,200 $ 1,872,000
v3.24.1.1.u2
Fair Value Measurements - Summary of change in the fair value of the Working Capital Loan and Related Party Measured Using Level 3 Inputs (Detail) - Working Capital Loan Related Party [Member] - Level 3 [Member] - USD ($)
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Working Capital Loan-related party $ 1,100,250 $ 150,000
Additional Working Capital Loan-related party   950,250
Change in fair value of Working Capital Loan-related party 0 0
Working Capital Loan-related party $ 1,100,250 $ 1,100,250
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