Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

The accompanying unaudited financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“

US GAAP

”) and pursuant to the rules and regulations of the SEC.

Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with US GAAP have been condensed. As such, except as disclosed herein, the information included in these unaudited financial statements should be read in conjunction with the audited financial statements as of December 31, 2022 filed with the SEC on the Form

10-K.

In the opinion of the Company’s management, these unaudited financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the Company’s financial position as of June 30, 2023 and the Company’s results of operations and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

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 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 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.

Use of Estimates

The preparation of the condensed financial statements in conformity with US GAAP requires the Company’s 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 balance sheet.

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 balance sheet, 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. As of June 30, 2023 and December 31, 2022, the Company has cash of $914,535 and $1,108,361, respectively. The Company did not have any cash equivalents as of June 30, 2023 and December 31, 2022.

Cash and investments held in Trust Account

At June 30, 2023 and December 31, 2022, the Company had $223 million and $218 million in cash and investments held in the Trust Account, respectively.

Offering Costs associated with an Initial Public Offering

The Company complies with the requirements of the Financial Accounting Standards Board ASC

340-10-S99-1

and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, “

Expenses of Offering

.” Offering costs of $624,831 consist principally of costs incurred in connection with formation of the Company and preparation for the Initial Public Offering. These costs, together with the underwriter discount of $11,817,870, were charged to additional

paid-in

capital upon completion of the Initial Public Offering. Total offering costs in connection with the Initial Public Offering were $12,432,293.

Class A ordinary shares subject to possible redemption

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance enumerated in ASC 480 “

Distinguishing Liabilities from Equity

”. Conditionally redeemable ordinary shares (including 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) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s Class A ordinary shares feature contains certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, Class A ordinary shares subject to possible redemption are classified as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. Given the above, the management determined that to the extent funds are available, shares of the Company’s redeemable equity should be reported as temporary equity. Accordingly, as of June 30, 2023 and December 31,

2022, 21,487,039 Class A ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of the Company’s balance sheet. The Company did not make any adjustments to the redemption value of the Class A ordinary shares. The amount of Class A ordinary shares reflected on the balance sheet are reconciled in the following table.


Class A ordinary shares subject to possible redemption at December 31, 2022	$	217,975,363
Plus: Accretion of Class A ordinary shares to redemption value for the three months ended March 31, 2023		2,312,827
Class A ordinary shares subject to possible redemption at March 31, 2023		220,288,190

Plus: Accretion of Class A ordinary shares to redemption value for the three months ended June 30, 2023		2,626,473
Class A ordinary shares subject to possible redemption at June 30, 2023	$	222,914,663

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts.

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.

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. The Company’s management determined that the Cayman Islands is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2023 and December 31, 2022. 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 statement.

Net loss per share

Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period. The Company applies the

two-class

method in calculating earnings per share. Earnings and losses are shared pro rata between the two classes of shares. The calculation of diluted income per ordinary share does not consider the effect of the warrants issued in connection with the (i) Public Offering, (ii) exercise of over-allotment and (iii) Private Placement, since the exercise of the warrants is contingent upon the occurrence of future events. As a result, diluted earnings per ordinary share is the same as basic earnings per ordinary share for the periods presented. The warrants are exercisable to purchase 12,027,285 Class A ordinary shares in the aggregate.

The following table reflects the calculation of basic and diluted net income (loss) per ordinary share (in dollars, except per share amounts):


	Three Months Ended June 30,
	2023		2022
Class A ordinary shares
Numerator: Income allocable to Class A ordinary shares	$	1,884,974	$	3,616
Denominator: Basic and diluted weighted average shares outstanding		21,487,039		21,487,039

Basic and diluted net income per share, Class A ordinary shares	$	0.09	$	0.00

Class B ordinary shares
Numerator: Income allocable to Class B ordinary shares	$	471,244	$	904
Denominator: Basic and diluted weighted average shares outstanding		5,371,760		5,371,760

Basic and diluted net income per share, Class B ordinary shares	$	0.09	$	0.00


	Six Months Ended June 30,
	2023		2022
Class A ordinary shares
Numerator: Income (loss) allocable to Class A ordinary shares	$	3,472,483	$	(231,506	)
Denominator: Basic and diluted weighted average shares outstanding		21,487,039		21,487,039

Basic and diluted net income (loss) per share, Class A ordinary shares	$	0.16	$	(0.01	)

Class B ordinary shares
Numerator: Income (loss) allocable to Class B ordinary shares	$	868,121	$	(57,877	)
Denominator: Basic and diluted weighted average shares outstanding		5,371,760		5,371,760

Basic and diluted net income (loss) per share, Class B ordinary shares	$	0.16	$	(0.01	)

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature. The Company determines fair value based on assumptions that market participants would

use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 Inputs: Unadjusted quoted prices for identical assets or instruments in active markets.

Level 2 Inputs: Quoted prices for similar instruments in active markets and quoted prices for identical or similar instruments in markets that are not active and model derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs: Significant inputs into the valuation model are unobservable.

The Company does not have any recurring Level 2 or Level 3 assets or liabilities. The carrying value of the Company’s financial instruments including its cash approximates their fair values principally because of their short-term nature.

At June 30, 2023 and December 31, 2022, the Company had $223 million and $218 million in cash and investments held in the Trust Account, respectively and are classified as level 1 investments. The Company’s trust account holds funds that invest in treasury bills.

Recent Accounting Standards

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

Waverley Capital Acquisition Corp. 1 10-Q