NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS:
| a. | Organization
and General |
SPREE
ACQUISITION CORP. 1 LIMITED (hereafter – the Company) is a blank check company, incorporated on August 6, 2021 as a Cayman Islands
exempted company, formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination (hereafter – the Business Combination).
Although
the Company is not limited to a particular industry or geographic region for the purpose of consummating a Business Combination, the
Company intends to focus its search on mobility-related technology businesses.
The
Company is an early stage and an emerging growth company, and as such, the Company is subject to all of its risks associated with early
stage and emerging growth companies.
All
activity for the period from August 6, 2021 (inception) through March 31, 2022 relates to the Company’s formation and its initial
public offering (the “Public Offering”) described below and identifying and evaluating prospective acquisition targets for
an Initial Business Combination. The Company generates income in the form of interest income on cash and cash equivalents from the proceeds
derived from the Public Offering and the Private Placement (as defined below in Note 1(b)).
The
Company has selected December 31 as its fiscal year end.
The
Company’s sponsor is Spree Operandi, LP, a Cayman Islands exempted limited partnership, which formed a wholly owned subsidiary,
Spree Operandi U.S. LP, a Delaware limited partnership, for purposes of holding securities of the Company (collectively, the parent company
and subsidiary, the “Sponsor”).
The
registration statement relating to the Company’s Public Offering was declared effective by the United States Securities and Exchange
Commission (the “SEC”) on December 15, 2021. The initial stage of the Company’s Public Offering— the sale of
20,000,000 Units at a price of $10 per Unit or $200 million in the aggregate — closed on December 20, 2021. In addition, the Sponsor
purchased in a private placement that closed concurrently with the Public Offering (the “Private Placement”) an aggregate
of 945,715 private Units (see also note 3) (the “Private Units”) at a price of $10 per Private Unit, or $9,457,150 in the
aggregate. Upon those closings, $204 million was placed in a trust account (the “Trust Account”) (see also note 1(c) below).
Out of the $204 million placed in the trust account, $200 million was derived from the gross proceeds of the Public Offering, inclusive
of the partial exercise of the over-allotment option by the underwriter, and an additional $4 million was derived from the proceeds invested
by the Company’s Sponsor in the Private Placement, for the benefit of the public. The Company intends to finance its initial Business
Combination with the net proceeds from the Public Offering and the Private Placement.
The
proceeds held in the Trust Account are invested only in specified U.S. government treasury bills or in specified money market funds registered
under the Investment Company Act and compliant with Rule 2a-7. Unless and until the Company completes the Business Combination, it may
pay its expenses only from the net proceeds of the Private Placement held outside of the Trust Account. The balance
outside the Trust Account as of March 31, 2022 was approximately $0.8 million.
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.):
| d. | Initial
Business Combination |
The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering,
although substantially all of the net proceeds of the Public Offering are intended to be generally applied toward consummating an initial
Business Combination. The initial Business Combination must occur 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 (excluding taxes payable on the income accrued in the Trust Account).
There is no assurance that the Company will be able to successfully consummate an initial Business Combination.
The
Company, after signing a definitive agreement for an initial Business Combination, will provide its public shareholders the opportunity
to redeem all or a portion of their shares upon the completion of the initial Business Combination, either (i) in connection with a shareholder
meeting called to approve the Business Combination or (ii) by means of a tender offer. However, in no event will the Company redeem its
public shares in an amount that would cause its net tangible assets to be less than $5 million following such redemptions. In such case,
the Company would not proceed with the redemption of its public shares and the related initial Business Combination, and instead may
search for an alternate initial Business Combination.
If
the Company holds a shareholder vote or there is a tender offer for shares in connection with an initial Business Combination, a public
shareholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on
deposit in the Trust Account, calculated as of two days prior to the general meeting or commencement of the Company’s tender offer,
including interest but less taxes payable. As a result, the Company’s Class A ordinary shares are recorded at redemption amount
and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”
Pursuant
to the Company’s memorandum and articles of association, if the Company is unable to complete the initial Business Combination
within a 15-month period (such 15-month period extended (a) to 18 months if the Company has filed (i) a Form 8-K including
a definitive merger or acquisition agreement or (ii) a proxy statement, registration statement or similar filing for an initial business
combination but has not completed the initial business combination within such 15-month period or (b) two instances by an additional
three months each instance for a total of up to 18 months or 21 months, respectively, by depositing into the trust account
for each three month extension an amount equal to $0.10 per unit) or during any shareholder-approved extension period, (hereafter —
the Combination Period), following the closing of the Public Offering, the Company will (i) cease all operations except for the purpose
of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes payable, and less up to $100 thousand of interest to pay dissolution expenses), divided by the number of then issued
and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including
the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining shareholders and the Company’s board
of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Cayman Islands law to provide for
claims of creditors and the requirements of other applicable law.
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.):
The
Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they
have waived their rights to liquidating distributions from the Trust Account with respect to any Class B ordinary shares (as described
in note 3) held by them if the Company fails to complete the initial Business Combination within 15 months or during any extension period
following the closing of the Public Offering. However, if the Sponsor or any of the Company’s directors or officers acquire any
Class A ordinary shares, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the
Company fails to complete the Business Combination within the prescribed time period.
In
the event of a liquidation, dissolution or winding up of the Company after an initial Business Combination, the Company’s shareholders
are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision
is made for each class of stock, if any, having preference over the ordinary shares. The Company’s shareholders have no preemptive
or other subscription rights. There are no sinking fund provisions applicable to the ordinary shares, except that the Company will provide
its shareholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then
on deposit in the Trust Account, under the circumstances, and, subject to the limitations, described herein.
| e. | Substantial
Doubt about the Company's Ability to continue as a Going Concern |
In
connection with the Company’s assessment of going concern considerations in accordance with ASC 205-40, “Going Concern”,
the Company has until March 20, 2023 (unless such period is extended, as detailed under d. Initial Business Combination above) to
consummate the initial Business Combination. If a business combination is not consummated by this date (unless extended), there will
be a mandatory liquidation and subsequent dissolution of the Company.
Management
has determined that the mandatory liquidation, should a business combination not occur, and potential subsequent dissolution, raises
substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts
of assets or liabilities should the Company be required to liquidate after March 20, 2023. The Company intends to complete the initial
Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate
any business combination by March 20, 2023.
| f. | Emerging
Growth Company |
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 a 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 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.
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
1 – DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (cont.):
This
may make a comparison of the Company’s financial statement with another public company which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible, because of the potential
differences in accounting standards used.
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES:
The
financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America (hereafter
– U.S. GAAP) and the regulations of the Securities Exchange Commission (hereafter – SEC). The significant accounting policies
used in the preparation of the financial statement are as follows:
The
Company’s unaudited condensed financial statements have been prepared in accordance with U.S. GAAP and the rules and regulations
of the SEC for interim financial information and the instructions to Form 10-Q.
Certain
disclosures included in the financial statements as of, and for the period from August 6, 2021 to December 31, 2021, have been condensed
or omitted from these financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of
the SEC. These unaudited condensed financial statements reflect all adjustments that are, in the opinion of management, necessary for
a fair statement of the results for the interim periods presented. These adjustments are of a normal, recurring nature. Interim period
operating results may not be indicative of the operating results for a full year.
The
unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements.
| b. | Use of estimates in the preparation of financial statement |
The
preparation of the financial statement in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statement
and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates and such
differences may have a material impact on the Company’s financial statement.
| c. | Earnings (loss) per share |
The
Company complies with accounting and disclosure requirements of FASB ASC Topic 260, Earnings Per Share. Basic earnings per share is computed
by dividing net loss attributable to holders of ordinary shares of the Company, by the weighted average number of ordinary shares outstanding
for the reporting period.
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES (cont.):
In
computing the Company’s diluted earnings per share, the denominator for diluted earnings per share is a computation of the weighted-average
number of ordinary shares and the potential dilutive ordinary shares outstanding during the period.
Fair
value is based on the price that would be received from the sale of an asset or that would be paid to transfer a liability in an orderly
transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements,
the guidance establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three
broad levels, which are described as follows:
| Level
1: | Quoted
prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy
gives the highest priority to Level 1 inputs. |
| Level
2: | Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. |
| Level
3: | Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
In
determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
The
Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (hereafter – ASC 740). ASC 740 prescribes
the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between
the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in
effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax
assets to their estimated realizable value if it is more likely than not that a portion or all of the deferred tax assets will not be
realized, based on the weight of available positive and negative evidence. Deferred tax liabilities and assets are classified as non-current
in accordance with ASC 740.
The
Company accounts for uncertain tax positions (“UTPs”) in accordance with ASC 740-10. ASC 740-10 contains a two-step approach
to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position taken or expected to be taken in
a tax return by determining if the weight of available evidence indicates that it is more likely than not that, on an evaluation of the
technical merits, the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The
second step is to measure the tax benefit as the largest amount that is more than 50% (cumulative probability) likely to be realized
upon ultimate settlement. The Company accrues interest and penalties related to unrecognized tax benefits under taxes on income (tax
benefit).
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
2 – SIGNIFICANT ACCOUNTING POLICIES (cont.):
| f. | Recent accounting pronouncements |
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on the Company's financial statement.
NOTE
3 – CAPITAL DEFICIENCY:
Class
A ordinary shares
The
Company is authorized to issue up to 500,000,000 Class A ordinary shares of $0.0001 par value each. Pursuant to the Public Offering,
as of March 31, 2022, the Company issued and sold an aggregate of 20,000,000 Class A ordinary shares as part of the Units sold in the
transaction. The Units (which also included Warrants) were sold at a price of $10 per Unit, for aggregate consideration of $200 million
in the Public Offering. The Sponsor purchased an aggregate of 945,715 private shares as part of the Private Units (which also included
private warrants) sold in the Private Placement at a price of $10 per Private Unit, or $9,457,150 in the aggregate.
Class
B ordinary shares
The
Company is authorized to issue up to 50,000,000 Class B ordinary shares of $0.0001 par value each. On August 23, 2021 the Company issued
5,750,000 Class B ordinary shares of $0.0001 par value each for a total consideration of $25,000 to the Sponsor. On November 23, 2021,
the Sponsor surrendered to the Company for cancellation and for nil consideration 718,750 Class B ordinary shares of par value $0.0001
each. On January 29, 2022, the underwriter’s over-allotment option to buy up to an aggregate of 125,000 additional Units expired
unexercised. As a result, 31,250 of the original 5,031,250 Class B ordinary shares issued to the sponsor, which were subject to forfeiture
to the extent the underwriter’s over-allotment option was not fully exercised, were cancelled, leaving the sponsor with 5,000,000
Class B ordinary shares.
Class
B ordinary shares are convertible into Class A ordinary shares, on a one-to-one basis, at any time and from time to time at the option
of the holder, or automatically on the day of the Business Combination. Class B ordinary shares also possess the sole right to vote for
the election or removal of directors, until the consummation of an initial Business Combination.
The
Company is authorized to issue up to 5,000,000 preference shares of $0.0001 par value each. As of March 31, 2022, the Company has no
preference shares issued and outstanding.
NOTE
4 – LOSS PER SHARE:
As
of March 31, 2021, the Company had two classes of ordinary shares, Class A ordinary shares subject to possible redemption and non-redeemable
Class A ordinary shares and Class B ordinary shares.
SPREE
ACQUISITION CORP. 1 LIMITED
NOTES
TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE
4 – LOSS PER SHARE (cont.):
Earnings
or losses are shared pro rata between the two classes of ordinary shares, based on the weighted average number of shares issued outstanding
for the period ended March 31, 2022 as follows:
| | |
Three months ended
March 31,
2022 | |
| | |
U.S. dollars in thousands (except share data) | |
| Loss attributable to redeemable Class A ordinary shareholders | |
| (220 | ) |
| Weighted average of Class A ordinary shares subject to possible redemption | |
| 20,000,000 | |
| Basic and diluted loss per Class A ordinary share subject to possible redemption | |
| (0.01 | ) |
| Loss attributable to non-redeemable Class A and Class B ordinary shareholders | |
| (70 | ) |
| Weighted average of non-redeemable Class A and Class B ordinary shares | |
| 5,945,715 | |
| Basic and diluted loss per non-redeemable Class A and Class B ordinary shares | |
| (0.01 | ) |
As
of March 31, 2022, the Company did not have any dilutive securities or any other contracts which could, potentially, be exercised or
converted into ordinary shares and then share in the earnings of the Company.
NOTE
5 – RELATED PARTY TRANSACTIONS:
On
August 22, 2021, the Company signed an agreement with the Sponsor, under which the Company shall pay the Sponsor a fixed $10 thousand
per month for office space, utilities and other administrative expenses. The monthly payments under this administrative services agreement
commenced on the effective date of the registration statement for the Public Offering and will continue until the earlier of (i) the
consummation of the Company’s Business Combination, or (ii) the Company’s liquidation.
NOTE
6 – COMMITMENTS AND CONTINGENCIES:
Underwriter’s
Deferred Compensation
Under
the Underwriting Agreement, the Company shall pay an additional fee (the “Deferred Underwriting Compensation”) of 4.5% ($9
million) of the gross proceeds of the Public Offering, payable upon the Company’s completion of the Business Combination. The Deferred
Underwriting Compensation will become payable to the underwriter from the amounts held in the Trust Account solely in the event the Company
completes the Business Combination.
The
Deferred Underwriting Compensation has been recorded as a deferred liability on the balance sheet as of March 31, 2022, as management
has deemed the consummation of a Business Combination to be probable.