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 September 30, 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 September
30, 2022 was approximately $94 thousands.
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 nine months each instance for a total
of up to 18 months or 21 months, respectively, by depositing into the trust account for each nine 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 |
As of September 30, 2022, the Company
had approximately $94 thousand of cash and an accumulated deficit of $8,809 thousand. In connection with the Company’s
assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standard Codification
205-40, “Going Concern”, the Company may need to obtain additional funds in order to satisfy its liquidity needs in its search
for an Initial Business Combination. Since its inception date and through the issuance date of these financial statements, the Company’s
liquidity needs were satisfied through an initial capital injection from the Sponsor, followed by net Private Placement proceeds, as well
as several borrowings of funds under promissory notes issued by the Company to the Sponsor (which borrowings were repaid upon the closing
of the Company’s Public Offering). Management has determined that it will need to rely and is significantly dependent on amounts
to be made available under future promissory notes or other forms of financial support to be provided by the Sponsor (which the Sponsor
is not obligated to provide).
Moreover, the Company has until June 20, 2023 (which reflects
an Extension Period due to the Company's announcement of entry into the Business Combination Agreement, as per d. Initial Business Combination
above and Note 7 below) 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.
SPREE ACQUISITION CORP. 1 LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS (cont.):
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 ahead of March 20, 2023, nor that it will be able to raise sufficient funds to complete an Initial Business
Combination.
No adjustments have been made to the carrying
amounts of assets or liabilities should the Company fail to obtain financial support in its search for an Initial Business Combination,
nor if it is required to liquidate after 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.
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.
SPREE ACQUISITION CORP. 1 LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
| 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.
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 nine 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.
SPREE ACQUISITION CORP. 1 LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (cont.):
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).
| 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 September 30, 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 September 30, 2022, the Company has no preference shares issued and outstanding.
SPREE ACQUISITION CORP. 1 LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 - EARNING (LOSS) PER
SHARE:
As of September
30, 2022, 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.
Earnings or
losses are shared pro rata (excluding the interest earned on marketable securities held in trust account) between the two classes of ordinary
shares, based on the weighted average number of shares issued outstanding for the period ended September 30, 2022. Then, the interest
earned on marketable securities held in trust account (being the accretion to redemption value of the Class A ordinary shares subject
to possible redemption) is fully allocated to the Class A ordinary shares subject to redemption.
The calculation
is as follows:
| | |
Nine months
ended
September 30,
2022 | | |
Three months
ended
September 30,
2022 | | |
Period from
August 6,
2021
(inception) to
September 30,
2021 | |
| | |
U.S. dollars in thousands (Except share data) | |
| | |
| | |
| | |
| |
| Loss attributable to redeemable Class A ordinary shareholders | |
| (1,123 | ) | |
| (540 | ) | |
| - | |
| Accretion on Class A ordinary shares subject to possible redemption | |
| 1,204 | | |
| 959 | | |
| - | |
| | |
| 81 | | |
| 419 | | |
| - | |
| Weighted average of Class A ordinary shares subject to possible redemption | |
| 20,000,000 | | |
| 20,000,000 | | |
| - | |
Basic and diluted earning per Class A ordinary share subject to possible redemption | |
| 0.00 | | |
| 0.02 | | |
| - | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Loss attributable to non-redeemable Class A and Class B ordinary shareholders | |
| (334 | ) | |
| (160 | ) | |
| (146 | ) |
| Weighted average of non-redeemable Class A and Class B ordinary shares | |
| 5,945,715 | | |
| 5,945,715 | | |
| 3,939,815 | |
Basic and diluted loss per non-redeemable Class A and Class B ordinary shares | |
| (0.06 | ) | |
| (0.03 | ) | |
| (0.04 | ) |
The Company had
outstanding warrants to purchase up to 10,472,858 class A shares. The weighted average of such shares was excluded from diluted net loss
per share calculation since the exercise of the warrants is contingent on the occurrence of future events.
As of September
30, 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.
SPREE ACQUISITION CORP. 1 LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
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 September 30, 2022, as management has deemed the consummation of
a Business Combination to be probable.
NOTE 7 - SUBSEQUENT EVENT:
In October 2022, the Company entered
into a business combination agreement with WHC Worldwide, LLC, a Missouri limited liability company doing business as zTrip. This
business combination is expected to close in the first half of 2023 and it subject to the approval by the Company’s
shareholders. The Company intend to effectuate this initial business combination using (i) cash from the proceeds of the initial
public offering and the private placement of the private units, (ii) cash from a new financing involving the sale of shares and/or
other equity, (iii) cash from one or more debt financings, and/or (iv) issuance of shares to target company shareholders.