468 SPAC II SE
Société européenne
CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED
31 DECEMBER 2022
Registered office: 9, rue de Bitbourg
L - 1273 Luxembourg
R.C.S. Luxembourg: B257664
468 SPAC II SE
Consolidated financial statements for the year ended
31 December 2022
Index to the consolidated financial statements
Page(s)
Consolidated management report
1 - 5
Corporate governance statement
6
Auditor’s report
7 - 11
Consolidated statement of comprehensive income
12
Consolidated statement of financial position
13
Consolidated statement of changes in equity
14
Consolidated statement of cash flows
15
Notes to the consolidated financial statements
16 - 37
468 SPAC II SE
Consolidated Management Report
for the year ended 31 December 2022
The Management Board of 468 SPAC II SE (hereafter the “Company”) submit its management report
with the consolidated financial statements of the Company and its subsidiaries (the “Group”) for the
year ended 31 December 2022.
1. Overview
The Company is a special purpose acquisition company (otherwise known as a blank cheque
company) incorporated in Luxembourg on 26 July 2021 and registered with the Luxembourg Trade
and Companies Register on 4 August 2021. The Company’s corporate purpose is the acquisition of a
business with principal business operations in a member state of the European Economic Area or the
United Kingdom or Switzerland that is based in the technology and technology-enabled sector with a
focus on the sub-sectors consumer technology and software & artificial intelligence through a merger,
capital stock exchange, share purchase, asset acquisition, reorganization or similar transaction (the
“Business Combination”). The Company intends to complete the Business Combination using cash
from the proceeds of the private placement of the class A shares and class A warrants (see below).
2. Review and development of the Group’s business, financial performance and financial
position
The Company completed its Private Placement (the “Private Placement”) on 18 January 2022 through
the issuance of 21,000,000 redeemable class A shares with a par value of EUR 0.016 (the “Public
Shares”) and 7,000,000 class A warrants (the “Public Warrants”). The Public Shares are admitted to
trading on the Frankfurt Stock Exchange under the symbol “SPV2” on 20 January 2022. Likewise, the
Public Warrants are also admitted to trading on the Frankfurt Stock Exchange under the symbol
“SPVW”. One Public Share and one-third (1/3) of a Public Warrant (each, a “Unit”), were sold at a
price of €10.00 per unit representing a total placement volume of EUR 210 million.
The sponsors of the Company subscribed to class B shares without nominal value amounting to
EUR 120,000.00. On 11 January 2022 and as subsequently amended on 17 January 2022, the
Sponsors, the members of the Supervisory Board of the Company, directly or through their affiliates,
as well as BD1 GmbH and Fabian Zilker (together, the “Co-Sponsors”) subscribed to an aggregate
5,140,000 class B warrants (the “Sponsor Warrants”) at a total price of EUR 7,710,000. The class B
shares and Sponsor Warrants are not publicly traded securities. The Sponsor has agreed to a lock-up
period running at least until the Business Combination, subject to customary exceptions described in
the Company’s prospectus (the “Prospectus”).
Financial performance highlights
As a blank cheque company, the Group currently does not have an active business. The Group did
not generate revenue during the year ended 31 December 2022 and is not expected to generate any
operating revenues until after the completion of the Business Combination. The Group’s activities for
the year ended 31 December 2022 were those necessary to prepare for the Private Placement and
the subsequent listing on the Frankfurt Stock Exchange, and, after the listing, to identify a target
company for a Business Combination and the potential acquisition, described below. The Group
incurred expenses as a result of being a public company (for legal, financial reporting, accounting and
auditing compliance).
The net loss of the Group for the year ended 31 December 2022 was EUR 12,758,890 (2021: 207,450),
due to the operating expenses, finance costs and net fair value loss on the warrants.
- 1 -
Financial position highlights
The Group’s main asset accounts refer to the cash in escrow which are the proceeds from the Private
Placement, including the additional sponsor subscription to cover the negative interest. Whereas on
the liability section, the significant balances refer to redeemable class A shares and class A and B
warrants.
3. Principal risk and uncertainties
The Group has analysed the risks and uncertainties to which its business is subject, and the
Management Board of the Company has considered their potential impact, their likelihood, controls
that the Group has in place and steps the Group can take to mitigate such risks. The Group’s principal
risks and uncertainties can be summarised as follows:
Risk
Likelihood
Mitigating factors
Benefits not achieved & the liquidation Low/Medium The Company has signed a Business
of the Company
Combination Agreement with a target
There is no assurance that the Company
and the shareholders are expected to
will
identify
suitable
Business
approve the Business Combination on
Combination
opportunities
by the
the
annual/extraordinary
general
Business Combination Deadline, which
meeting.
would ultimately lead to the liquidation of
the Company. Furthermore, in the event of
a shareholder vote against the Business
Combination at the AGM, the Company's
window of opportunity to pursue alternate
business
combination
possibilities
becomes notably constrained.
Going concern risk in case of no Medium
The Company is undertaking continuous
business combination
control and monitoring of expenses
The Company has incurred fees and
incurred in view of its available funding
expenses associated with preparing and
and has engaged reputable service
completing the Business Combination.
providers to assist with this monitoring.
The Company may need to arrange third-
As at the date of this report the Board
party financing and there can be no
believes that the Company has sufficient
assurance that it will be able to obtain
funds to meet the fees and expenditures
such financing, which could compel the
required for operating its business prior
Company to restructure or abandon the
to the closing of the Business
Business Combination.
Combination.
Accruing third-party financing
Medium/High The
Management
Board
and
The Company may need to arrange third-
Supervisory Board believes that the
party financing (e.g., for
a
PIPE
long-standing experience, reputation
transaction) and there can be no
and extensive network as entrepreneurs
assurance that it will be able to obtain
and professional investors has proven
such financing, which could compel the
the ability to acquire significant funding
Company to restructure or abandon a
volumes. Additionally, the management
particular
proposed
Business
is in a close consultation with investment
Combination.
banks on the feasibility of an equity raise
prior to proposing the Business
Combination opportunity to the Annual
General Meeting.
Legal and regulatory
Low
The Company is undertaking continuous
The Company may be adversely affected
control and monitoring measure of the
by changes to the regulations, law,
ongoing legal and regulatory landscape.
account and general tax environment in
Moreover, the management and the
Luxembourg and Germany as well as the
supervisory board is supported by
leading service providers on the
- 2 -
Risk
Likelihood
Mitigating factors
jurisdiction which the target business is
respective legal, accounting and tax
subject to.
domains.
Market conditions
Medium
The Company has signed a Business
Adverse events (e.g., the conflict between
Combination Agreement with a target
Russia and Ukraine or the COVID-19
and does not expect that the current
pandemic) and economic recession might
market conditions will prevent the
prevent the completion of the Business
completion
of
the
Business
Combination.
Combination.
The other risks surrounding the Group are further disclosed in the Prospectus.
4. Financial risk management objectives and policies
As at 31 December 2022, the Group had EUR 1,665,134 in cash and cash equivalents
(2021: EUR 1,523,118). The proceeds from the Private Placement, including the additional sponsor
subscription to cover the negative interest, is presented as cash in escrow in the consolidated financial
statements, for an amount of EUR 210,411,275 (2021: nil).
The Group has a negative equity of EUR 11,800,270 as at 31 December 2022 (2021: positive equity
of EUR 992,550). The Management Board believes that the funds available to the Group outside of
the secured deposit account are sufficient to pay costs and expenses incurred by the Group prior to
the completion of the Business Combination. The Group has financial instruments which are presented
as non-current liabilities which does not impose any liquidity issues to the Group. The class B warrants
designated as Sponsor Capital At-Risk amounting to EUR 8,401,600 (See Note 13.1 to the
consolidated financial statements) have no redemption rights or liquidation distribution rights and will
expire worthless in case of liquidation. Furthermore, the class A warrants amounting to EUR 5,460,000
are redeemable at the option of the Company (See Note 13.2 to the consolidated financial statements).
As at 31 December 2022, the Group conducted no operations and currently generated no revenue.
The Group also does not have any foreign currency transactions nor any interest-bearing loans.
Beside the above, the Group identified the related financial risks and has considered their potential
impact, their likelihood, and controls in place to mitigate such risks. The applicable financial risks to
the Group are liquidity risks and credit risks which are described in Note 17 of the consolidated financial
statements.
5. Related party transactions
Please see Notes 15 and 18 to the consolidated financial statements.
6. Research and development
The Group did not have any activities in the field of research and development during the financial
year ended 31 December 2022 and 2021.
- 3 -
7. Corporate governance
As a Luxembourg governed company traded on the Frankfurt Stock Exchange, the Group is not
required to adhere to the Luxembourg corporate governance regime applicable to companies that are
traded in Luxembourg or to the German corporate governance regime applicable to listed companies
in Germany. As these regimes have not been designed for special purpose acquisition companies like
the Company but for fully operational companies, the Company has opted to not apply the Luxembourg
or German corporate governance regime on a voluntary basis either.
The Company’s articles of association (the “Articles”) are available on the website of the Company
(https://www.468spac2.com/). The function of the audit committee shall be assumed by the
Supervisory Board as long as the Company qualifies as small and medium sized enterprises (SMEs)
in accordance with article 2 (1), (f) of the directive 2003/71/EC of the European parliament and of the
Council of 4 November 2003 on the prospectus to be published when securities are offered to the
public or admitted to trading and amending Directive 2001/34/EC. If the criteria are no longer fulfilled,
the Supervisory Board will appoint an audit committee and adopt its terms of reference in accordance
with applicable laws.
The Management Board is composed of four members: Alexander Kudlich (Chief Executive Officer),
Ludwig Ensthaler (Chief Investment Officer), Florian Leibert (Chief Technology Officer) and Werner
Weynand (Chief Administrative Officer). The Company is managed by the Management Board which
exercises its functions under the supervision of the Supervisory Board. The Management Board is
vested with the broadest powers to act in the name of the Company and to take any action necessary
or useful to fulfil the Company's corporate purpose, with the exception of the powers reserved to the
Supervisory Board or to the general meeting of shareholders by any laws or regulations or by the
Articles of Association.
The supervisory board shall be in charge of the permanent supervision and control of the Company’s
management by the Management Board. It may in no case interfere with such management. The
Supervisory Board has an unlimited right of information regarding all operations of the Company and
may inspect any of the Company’s documents. It may request the Management Board to provide any
information necessary for exercising its functions and may directly or indirectly proceed to all
verifications which it may deem useful in order to carry out its duties. A member of the Management
Board cannot be a member of the Supervisory Board at the same time.
The Supervisory Board regularly advises and supervises the Management Board in its management
of the Company. It is involved in all decisions of fundamental importance for the Company.
The rules of procedures of the Management Board may provide for consent requirements of the
Supervisory Board. The Supervisory Board consists of Stefan Kalteis, Mato Peric and Katharina
Jünger, as the Chairperson.
8. Internal control and risk management systems in relation to the financial reporting
process
The Group has implemented a system of internal controls over financial reporting. It aims to identify,
evaluate and control any risks that could influence the proper preparation of the consolidated financial
statements. As a core component of the accounting and reporting process, the system of internal
controls over financial reporting comprises preventive, detective, monitoring, and corrective control
measures in accounting and operational functions, which are designed to ensure a methodical and
consistent process for preparing the Group’s financial statements.
The control and risk management mechanisms include identifying and defining processes, introducing
layers of approval, and applying the principle of segregation of duties including the use of external
service providers diligently selected and monitored. The Group’s internal controls over financial
reporting include policies and procedures that pertain to the maintenance of records that, in reasonable
detail, are designed to accurately and fairly reflect the transactions and dispositions of the assets of
the Group, provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with the applicable accounting standards, provide
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DocuSign Envelope ID: 7EE1B52C-C6CB-4C78-9FF0-90841997CD39
Mazars Luxembourg
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Luxembourg
Tel: +352 27 114 1
Fax: +352 27 114 20
www.mazars.lu
To the Shareholders of
468 SPAC II SE
Société européenne
R.C.S. Luxembourg B257664
9, rue de Bitbourg
L-1273 Luxembourg
REPORT OF THE REVISEUR D’ENTREPRISES AGREE
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of 468 SPAC II SE and its subsidiaries (the
“Group”), which comprise the consolidated statement of financial position as at 31 December 2022,
and the consolidated statement of comprehensive income, consolidated statement of changes in
equity, and consolidated statement of cash flows for the year then ended and the notes to the
consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give true and fair view of the
consolidated financial position of the Group as at 31 December 2022, and of its consolidated financial
performance and its consolidated cash flows f for the year then ended in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the EU Regulation No 537/2014, the Law of
23 July 2016 on the audit profession (“Law of 23 July 2016”) and with International Standards on
Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du Secteur
Financier” (“CSSF”). Our responsibilities under the EU regulation No 537/2014, the Law of 23 July
2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the
« Responsibilities of “réviseur d’entreprises agréé” for the Audit of the Consolidated Financial
Statements » section of our report. We are also independent of the Group in accordance with the
International Code of Ethics for Professional Accountants, including International Independence
Standards, issued by the International Ethics Standards Board for Accountants (IESBA Code) as
adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our
audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities
under those ethical requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Mazars Luxembourg – Cabinet de révision agréé
Société Anonyme – RCS Luxembourg B 159962 – TVA intracommunautaire : LU24665334
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Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current period. These matters were
addressed in the context of the audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Based on the result of our audit procedures no Key Audit Matter was identified for the audit of the
consolidated financial statements as of 31 December 2022.
Other information
The Management Board is responsible for the other information. The other information comprises the
information stated in the consolidated management report and the corporate governance statement
but does not include the consolidated financial statements and our report of the “réviseur
d’entreprises agréé” thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report this fact. We have
nothing to report in this regard.
Responsibilities of the Management Board and Those Charged With Governance of the Group
for the Consolidated Financial Statements
The Management Board is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRSs as adopted by the European Union and for such
internal control as the Management Board determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
The Management Board is also responsible for presenting and marking up the consolidated financial
statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on
European Single Electronic Format (“ESEF Regulation”).
In preparing the consolidated financial statements, the Management Board is responsible for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Management
Board either intends to liquidate the Group or to cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting
process.
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Responsibilities of the “réviseur d’entreprises agréé” for the Audit of the Consolidated
Financial Statements
The objectives of our audit are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with accordance with the EU Regulation No 537/2014, the Law of 23 July 2016 and with ISAs as
adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with the EU Regulation No 537/2014, the Law of 23 July 2016 and
with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management Board.
•
Conclude on the appropriateness of Management Board’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our report of the “Réviseur d’Entreprises Agréé” to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our report of the
“réviseur d’Entreprises Agréé”. However, future events or conditions may cause the Group to
cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
•
Assess whether the consolidated financial statements have been prepared, in all material
respects, in compliance with the requirements laid down in the ESEF Regulation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities and
•
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the Group
audit. We remain solely responsible for our audit opinion.
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We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence and communicate to them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards or actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our report unless law or
regulation precludes public disclosure about the matter.
Report on Other Legal and Regulatory Requirements
We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of Shareholders
on 30 June 2022 and the duration of our uninterrupted engagement, including previous renewals and
reappointments, is 1 year.
The consolidated management report is consistent with the consolidated financial statements and has
been prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the consolidated management report. The
information required by Article 68ter paragraph (1) letters c) and d) of the law of
19 December 2002 on the commercial and companies register and on the accounting records and
financial statements of undertakings, as amended, is consistent with the consolidated financial
statements and has been prepared in accordance with applicable legal requirements.
We have checked the compliance of the consolidated financial statements of the Group as at 31
December 2022 with relevant statutory requirements set out in the ESEF Regulation that are
applicable to the financial statements. For the Group, it relates to:
•
Consolidated financial statements prepared in valid xHTML format;
•
The XBRL markup of the consolidated financial statements using the core taxonomy and the
common rules on markups specified in the ESEF Regulation.
In our opinion, the consolidated financial statements of the Group as at 31 December 2022, have
been prepared, in all material respects, in compliance with the requirements laid down in the ESEF
Regulation.
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We confirm that the audit opinion is consistent with the additional report to the audit committee.
We confirm that the prohibited non-audit services referred to in EU Regulation No 537/2014 were not
provided and that we remained independent from the Group in conducting the audit.
Luxembourg, 25 April 2023
For Mazars Luxembourg, Cabinet de révision agréé
5, rue Guillaume J. Kroll
L-1882 Luxembourg
Fabien DELANTE
Réviseur d’entreprises agréé
11
468 SPAC II SE
Consolidated statement of comprehensive income for the year ended
31 December 2022
From 1 January 2022
From 4 August 2021
to 31 December 2022
to 31 December 2021
Notes
EUR
EUR
Revenue
-
-
Other operating expenses
6
(3,123,012 )
(207,208 )
Operating loss
(3,123,012 )
(207,208 )
Finance costs
9, 14, 15.1
(2,806,678 )
(242 )
Fair value loss on class B warrants
13.1
(1,439,200 )
-
Fair value loss on class A warrants
13.2
(5,390,000 )
-
Loss before income tax
(12,758,890 )
(207,450 )
Income tax
7
-
-
Loss for the year
(12,758,890 )
(207,450 )
Other comprehensive income
-
-
Total comprehensive loss for the
year, net of tax
(12,758,890 )
(207,450 )
Earnings/(loss) per share:
8
Net earnings per share
(2.38 )
(0.03 )
Diluted earnings per share
(2.38 )
(0.03 )
The accompanying notes form an integral part of these consolidated financial statements.
- 12 -
468 SPAC II SE
Consolidated statement of financial position as at
31 December 2022
31 December 2022
31 December 2021
Note
EUR
EUR
ASSETS
Current assets
9
Cash in escrow
-
10
Deferred costs
-
Other prepayments
-
11
Cash and cash equivalents
Total assets
EQUITY AND LIABILITIES
12
Equity
Share capital
Share premium
Other reserves
-
Legal reserve
-
-
Warrant reserve
-
Accumulated deficit
(12,966,340 )
(207,450 )
Total equity
(11,800,270 )
Non-current liabilities
13.1
Class B warrants at fair value
-
13.2
Class A warrants at fair value
-
-
Current liabilities
14
Redeemable Class A shares
-
15.1
Shareholder loan
-
15.2
Advances from Sponsors
-
15.3, 18
Payable to directors
-
16
Trade and other payables
Total liabilities
Total equity and liabilities
The accompanying notes form an integral part of these consolidated financial statements.
- 13 -
468 SPAC II SE
Consolidated statement of changes in equity for the year ended 31 December 2022
Share
Other
Warrant
Accumulated
Notes
capital Share premium
reserves
reserve
deficit
Total equity
EUR
EUR
EUR
EUR
EUR
EUR
Balance, 1 January 2022
-
-
(207,450 )
Repurchase and cancellation of 2,250,000 class B
shares
12
(36,000 )
-
-
-
-
(36,000 )
Allocation to warrant reserve
12
-
(121,400 )
-
-
-
Capital contribution without issuance of shares
12
-
-
-
-
Issuance of 21,000,000 class A shares, net of
transaction costs
12, 14
-
-
-
Reclassification of class A shares from equity to
liability (IAS 32)
12, 14
(336,000 )
(205,513,130 )
-
-
-
(205,849,130 )
Results for the financial year
-
-
-
-
(12,758,890 )
(12,758,890 )
Balance, 31 December 2022
(12,966,340 )
(11,800,270 )
Balance, 4 August 2021
-
-
-
-
-
-
Issuance of Class B shares
12
-
-
-
-
Capital contribution without issuance of shares
12
-
-
-
-
Results for the financial period
-
-
-
-
(207,450 )
(207,450 )
-
-
(207,450 )
Balance, 31 December 2021
The accompanying notes form an integral part of these consolidated financial statements.
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468 SPAC II SE
Consolidated statement of cash flows for the year ended
31 December 2022
From 1 January 2022
From 4 August 2021
to 31 December 2022
to 31 December 2021
Notes
EUR
EUR
Cash flows from operating activities
Loss before income tax
(12,758,890 )
(207,450 )
Adjustments for non-cash items:
Finance cost
9, 14, 15.1
Fair value loss on Class B warrants
-
13.1
Fair value loss on Class A warrants
-
13.2
Changes in working capital:
Decrease/ (Increase) in deferred costs and
(1,030,108 )
other prepayments
Increase in payable to directors
15.3
-
(Decrease)/ Increase in trade and other
16
(465,962 )
payables
Interest paid
(218,978 )
-
Net cash flows used in operating
(2,640,050 )
(78,741 )
activities
Cash flows from financing activities
Proceeds from issuance of class B shares
12
-
Repurchase of 2,250,000 class B shares
12
(36,000 )
-
12
Proceeds from additional capital contribution
Proceeds from issuance of class B warrants
13.1, 15.2
-
Proceeds from issuance of class A shares
13.2, 14
-
and class A warrants, net of private
placement costs
(Repayment)/ Proceeds of Shareholder loan
15.1
(34,500 )
(Repayment)/ Proceeds of Sponsor
15.2
(40,701 )
advances
Net cash flows from financing activities
Net increase in cash and cash equivalents
Of which:
Increase in restricted cash (Cash in
9
(210,411,275 )
-
Escrow)
Cash and cash equivalents, beginning
-
Cash and cash equivalents at end of year
The accompanying notes form an integral part of these consolidated financial statements.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
1. GENERAL INFORMATION
The registered office of the Company is located at
9, rue de Bitbourg, L-1273 Luxembourg
.
The Company is managed by its management board (“Management Board”) under the supervision and control of the supervisory board (“Supervisory Board”). This two-tier governance structure was resolved by an extraordinary shareholders’ meeting of the Company held on 2 November 2021. The Management Board is composed of Alexander Kudlich (Chief Executive Officer), Ludwig Ensthaler (Chief Investment Officer), Florian Leibert (Chief Technology Officer), and Werner Weynand (Chief Administrative Officer). The members of the Supervisory Board consists of Mato Peric, Katharina Jünger and Stefan Kalteis.
The sponsors of the Company are TEIXL Investments GmbH, Ophelia Capital UG and Florian Leibert (the “Sponsors”). The members of the Supervisory Board of the Company, directly or through their affiliates, as well as BD1 GmbH (formerly BD Capital GmbH) and Fabian Zilker (together, the “Co- Sponsors”) have also provided funds to the Company.
Upon closing of the Business Combination the above Company’s purpose shall cease to apply and the Company’s purpose shall be as from such time the creation, holding, management, development and realization of a portfolio, consisting of interests and rights of any kind and of any other form of investment in entities in Luxembourg and in foreign entities whether such entities exist or are to be created, especially by way of subscription, by purchase, sale, or exchange of securities or rights of any kind whatsoever, such as equity instruments, debt instruments as well as the administration and control of such portfolio.
The Company may further grant any form of security for the performance of any obligations of the Company or of any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of entities as the Company and lend funds or otherwise assist any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of companies as the Company.
- 16 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
The Company may borrow in any form and may issue any kind of notes, bonds and debentures and generally issue any debt, equity and/or hybrid securities in accordance with Luxembourg law.
The Company may carry out any commercial, industrial, financial, real estate or intellectual property activities which it may deem useful in accomplishment of these purposes.
Unlike other forms of companies, a Société Européenne only exists from the date of publication of its statutes with the RCS. Accordingly, the comparative period on these consolidated financial statements of 468 SPAC II SE and its subsidiaries (collectively the “Group”) were prepared from 4 August 2021 (date of registration of the Company with the RCS) to 31 December 2021. Any act performed and any transaction carried out by the Company between the date of incorporation and the date of registration is considered to emanate from the Company and is therefore included in the consolidated financial statements. These consolidated financial statements were authorized for issue in accordance with a resolution of the Management Board on 21 April 2023. The consolidated financial statements are published in accordance with the European Single Electronic Format regulation on the Company’s website (https://www.468spac2.com/).
2. SIGNIFICANT ACCOUNTING POLICIES
2.1. Basis of preparation
The Company’s financial year starts on 1 January and ends on 31 December of each year, with the exception of the first financial year which started on 4 August 2021 (date of registration with the RCS) and ended on 31 December 2021.
The consolidated financial statements have been prepared on a going concern basis (See Note 3) and in accordance with International Financial Reporting Standards (IFRS) published by the International Accounting Standards Board (IASB)as adoptedby the European Union. They are also prepared in Euros (EUR) which is the Group’s presentation and functional currency and have been prepared under the historical cost convention, except for financial instruments that are measured at fair value.
2.2. Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 31 December 2022.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
•
Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);
•
Exposure, or rights, to variable returns from its involvement with the investee; and
•
The ability to use its power over the investee to affect itsreturns.
- 17 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Generally, there is the presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
•
The contractual arrangements with the other vote holders of theinvestee;
•
Rights arising from other contractualarrangements; and
•
The Group’s voting rights and potential voting rights.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
2.3. Summary of significant accounting policies
International accounting standards include IFRS, IAS (International Accounting Standards) and their interpretations (Standing Interpretations Committee) and IFRICs (International Financial Reporting Interpretations Committee).
The repository adopted by the European Commission is available on the following internet site: http://ec.europa.eu/finance/accounting/ias/index_en.htm
a) New standards, amendments and interpretations that were issued but not yet applicable as
at 31 December 2022 and that are most relevant to the Group
▪
Amendments to IAS 1 - not yet endorsed by the EU: Classification of Liabilities as Current or Non-current. In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively.
▪
Amendments to IAS 1 - not yet endorsed by the EU: Non-current Liabilities with Covenants. In October 2022, the IASB issued Non-current Liabilities with Covenants, (Amendments to IAS 1), to clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are effective for reporting periods beginning on or after January 1, 2024.
▪
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies. In February 2021, the IASB issued amendments that are intended to help preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective for annual periods beginning on or after 1 January 2023.
- 18 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
▪
Amendments to IAS 8: Definition of Accounting Estimate. In February 2021, the IASB issued amendments to help entities to distinguish between accounting policies and accounting estimates. The amendments are effective for annual periods beginning on or after 1 January 2023.
▪
Amendments to IAS 12: Deferred Tax related to Assets and Liabilities arising from a Single Transaction. In May 2021, the IASB amended the standard to reduce diversity in the way that entities account for deferred tax on transactions and events, such as leases and decommissioning obligations, that lead to the initial recognition of both an asset and a liability. The amendments apply for annual reporting periods beginning on or after 1 January 2023 and may be applied early.
The initial application of these standards, interpretations and amendments to existing standards is planned for the period of time from when its application becomes compulsory. Currently, the Management Board anticipates that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial information of theGroup.
b) New Standards Issued – effective from 1 January 2022
The Company applied for the first time certain standards, amendments and interpretations which are effective for annual periods beginning on or after 1 January 2022 (unless otherwise stated). The Company has not early adopted any other standard, amendment or interpretation that has been issued but not yet effective.
▪
Reference to the Conceptual Framework – Amendments to IFRS 3: In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.
The IASB also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses arising from liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.
At the same time, the IASB decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively.
▪
Amendments to IAS 37: Onerous Contracts — Cost of Fulfilling a Contract. The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The amendments are effective for annual reporting periods beginning on or after 1 January 2022 with earlier application permitted.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
▪
Annual improvements to IFRS Standards 2018-2020: The annual improvements to IFRS consists of amendments to IFRS 1, IFRS 9, IFRS 16, and IAS 41. The amendments are effective for annual reporting periods beginning on or after 1 January 2022 with earlier application permitted.
c) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. Theacquiredprocess is considered substantiveif it is critical totheabilityto continue producing outputs, and the inputs acquired include an organised workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognised in the consolidated statement of comprehensive income in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognised in profit orloss.
When the amount of aggregate consideration transferred is in excess of the fair value of the net assets acquired a goodwill is recognized. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure theamounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
d) Foreign currencies
These consolidated financial statements are presented in EUR, which is the parent’s and subsidiaries functional currency and presentation currency.
Transactions denominated in currencies other than the EUR are recorded at the exchange rate at the transaction date.
e) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date i.e. the date that the Group commits to purchase or sell the asset.
Financial assets: The Group classifies its financial assets as subsequently measured at amortised cost or measured at fair value through profit or loss on the basis of both:
•
The entity’s business model for managing the financial assets; and
•
The contractual cash flow characteristics of the financial asset.
The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit and loss, transactioncosts.
Financial assets measured at amortised cost: This is the category most relevant to the Group. A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. Gains and losses are recognised in profit and loss when the asset is derecognised, modified or impaired.
The Group includes in this category cash and cash equivalents and cash in escrow.
Financial liabilities: The financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or financial liabilities at amortised cost.
The Group’s financial liabilities include trade and other payables, shareholder loan, advances from sponsors, payable to directors, redeemable class A shares, class A warrants at fair value and class B warrants at fair value.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transactioncosts.
Financial liabilities measured at amortised cost: This is the category most relevant to the Group. After initial recognition, trade and other payables, shareholder loan, advances from sponsors, payable to directors and redeemable class A shares are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisationprocess.
- 21 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the consolidated statement of comprehensive income.
Financial liabilities through profit or loss: Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the consolidated statement of comprehensive income.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss.
Derecognition:A financial asset is derecognised when the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the consolidated statement of comprehensive income.
Impairment of financial assets: The Group has chosen to apply an approach similar to the simplified approach for expected credit losses (“ECL”) under IFRS 9 to its financial assets. Therefore the Group recognises a loss allowance based on lifetime ECLs at each reporting date. The Group’s approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economicconditions.
f) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at banks and on hand and short-term highly liquid deposits with a maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of changes in value. The carrying amounts of these approximate their fair value.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Group’s cash management.
- 22 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
g) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
•
In the principal market for the asset or liability; or
•
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to theGroup.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
•
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
•
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectlyobservable;
•
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
h) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
- 23 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
i) Taxes
Income tax recognized in the consolidated statement of comprehensive income includes current and deferred taxes.
Current tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the consolidated statement of comprehensive income.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Deferred tax assets are tested for impairment on the basis of a tax planning derived from management business plans.
Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
j) Share-based payments
The Management Board is currently assessing whether certain class B shares and class B warrants issued to the Sponsor and Co-Sponsors of the Company are to be considered as falling in the scope of IFRS 2. The Management Board will notably adopt its position based on market discussions and/or positions adopted by market players, supervisory authorities and/or standard setters.
In any case, the class B shares and class B warrants do not carry a specified service period, but would be forfeited or otherwise expire worthless if a business combination is not consummated. Therefore, the Sponsor and Co-Sponsors only derive the value from the class B shares and class B warrants when they are converted into class A shares upon a successful business combination. Consequently, the grant date of these awards does not occur until the target is approved. As of 31 December 2022, irrespective of the conclusions of the ongoing assessment carried out by the Management Board, no amounts would have had to be accounted for provided that no such approval has occurred.
k) Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised in as part of other operating expenses in the consolidated statement of comprehensive income, together with a corresponding increase in equity, over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled
- 24 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the consolidated statement of comprehensive income for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.
No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the recipient of the share-based payment. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of these consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment in case of a new outbreak of a novel strain of the coronavirus (“COVID-19”) and the military conflict between Ukraine and Russia.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
As at 31 December 2022, the significant areas of estimates, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in these consolidated financial statements are:
•
Going concern: Despite the EUR 11,800,270 negative equity of the Group as at 31 December 2022, the Management Board decided to prepare these consolidated financial statements on a going concern basis for the following reasons:
- 25 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
-
On one hand, the redeemable class A shares, amounting to EUR 208,437,072, that are presented as current liabilities (debt instruments) in accordance with IAS 32, are true equity of the Company from a legal standpoint (see Note 14);
-
On the other hand, the class B warrants designated as Sponsor Capital At-Risk amounting to EUR 8,401,600 (See Note 13.1), which are currently presented as a non-current liability, will not be required to be paid in cash. These class B warrants have no redemption rights or liquidation distribution rights and will expire worthless in case of liquidation.
-
Furthermore, the class A warrants amounting to EUR 5,460,000 (See Note 13.2) is redeemable at the option of the Company, hence, this does not pose any liquidity issues to the Group.
In addition, the Management Board underlying assumption to prepare the consolidated financial statements is based on the anticipated successful completion of the Business Combination.
•
Deferred costs: According to the Management Board’s underlying assumption of a successful admission to the Frankfurt Stock Exchange, the related amounts incurred as transaction costs as at 31 December 2021 that qualify as incremental costs directly attributable to the private placement are deferred until the effects of the private placement is reflected in the accounts (See Note 10). These deferred costs were deducted from the proceeds of the private placement (See Note 14).
•
Deferred tax asset: A deferred tax asset in respect of the tax losses incurred has not been recognised as the Management Board estimates uncertainty in terms of future taxable profit against which the Group can utilise the benefits therefrom (See Note 7).
•
Classification of Redeemable class A shares: The Management Board assessed the classification of redeemable class A shares in accordance with IAS 32 under which the redeemable class A shares do not meet the criteria for equity treatment and must be recorded as liabilities (See Note 14). The class A shares features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, the Company classifies the Redeemable Class A shares as financial liabilities at amortised cost in accordance with IFRS 9. The transaction costs directly attributable to issuance of the redeemable class A shares which are subscribed via private placement (“Private Placement”) are deducted against the initial fair value.
•
Classification and measurement of Warrants: The Management Board assessed the classification of warrants in accordance with IAS 32 under which the warrants do not meet the criteria for equity treatment and must be recorded as derivatives. Accordingly, the Company classifies the class A warrants and class B warrants as liabilities at their fair value and adjust them to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the consolidated statement of comprehensive income. The fair value of class A warrants is determined based on its quoted market price or independently valued using Monte Carlo valuation model for periods when there are no observable trades, as of each relevant date. Likewise, the class B warrants which are not listed to the stock exchange are also independently valued using the Black-Scholes Option Pricing model to determine its fair value.
•
Class B shares and warrants as share-based payments: The Management Board is currently assessing whether certain class B shares and warrants issued to the Sponsor of the Company are to be considered as falling in the scope of IFRS 2. The Management Board will notably adopt its position based on market discussions and/or positions adopted by market players, supervisory authorities and/or standard setters.
- 26 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
In any case, the class B shares and class B warrants do not carry a specified service period, but would be forfeited or otherwise expire worthless if a business combination is not consummated. Therefore, the Sponsors and the Co-Sponsors only derive the value from the class B shares and class B warrants when they are converted into class A shares upon a successful business combination. Consequently, the grant date of these awards does not occur until the target is approved. As of 31 December 2022, irrespective of the conclusions of the ongoing assessment carried out by the Management Board, no amounts would have had to be accounted for provided that no such approval has occurred.
4. GROUP INFORMATION
Subsidiaries
The Group has been established on 10 August 2021. The wholly-owned subsidiaries of the Group as at 31 December 2022 are 468 SPAC II Advisors Verwaltungs-GmbH (formerly “aptus 1795. GmbH”), 468 SPAC II Advisors GmbH & Co. KG (formerly “cor 67. GmbH & Co. KG”) and 468 SPAC II Issuance GmbH & Co. KG.
The consolidated financial statements of the Group include the Company 468 SPAC II Advisors Verwaltungs-GmbH, 468 SPAC II Advisors GmbH & Co. KG and 468 SPAC II Issuance GmbH & Co. KG.
The parent company
The parent company of the Group is 468 SPAC II SE.
Segment information
The Group is currently organised as one reportable segment. The Group has been deemed to form one reportable segment as the Parent and its subsidiaries have been established together for the purpose of acquiring one operating business i.e. the Business Combination (See Note 1).
5. ACQUISITION AND INCORPORATION OF SUBSIDIARIES
On 10 August 2021, the Company acquired 468 SPAC II Advisors Verwaltungs-GmbH (“468 II Advisors GmbH”) and 468 SPAC II Advisors GmbH & Co. KG (“468 II Advisors KG”) for an amount of EUR 28,800 which included cash balances of EUR 25,100 (thereof EUR 25,000 from 468 II Advisors GmbH and EUR 100 from 468 II Advisors KG) and acquisition related costs of EUR 3,700.
On 20 January 2022, the Company contributed proceeds from the Private Placement for an amount of EUR 210.630.000,00 into 468 SPAC II Advisors GmbH & Co. KG.
On 8 February 2022, the Company incorporated 468 SPAC II Issuance GmbH & Co. KG for an amount of EUR 500. The Company further contributed an amount of EUR 194,240 into 468 SPAC II Issuance GmbH & Co. KG.
The acquired companies are companies with no business. Consequently, the acquisition has been accounted as acquisitions of assets that do not constitute a business combination.
- 27 -
468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
6. OTHEROPERATING EXPENSES
The other operating expenses of consist the following:
| From 1 January 2022 | From 4 August 2021 | |
| to 31 December 2022 | to 31 December 2021 | |
| EUR | EUR | |
| Legal fees | 1,041,647 | 44,178 |
| Director’s fees | 699,173 | - |
| Other consulting fees | 673,027 | - |
| Accounting and corporate fees | 222,106 | 36,555 |
| Tax advice fees | 145,709 | - |
| Audit fees (see below) | 105,888 | 67,568 |
| Other professional fees | 95,855 | 44,684 |
| Regulatory fees | 59,950 | - |
| Notarial and similar fees | 9,665 | 7,202 |
| Bank charges | 16,945 | 1,041 |
| Other expenses | 53,047 | 5,980 |
| Total | 3,123,012 | 207,208 |
The total audit fees paid breaks down as follows:
| From 1 January 2022 | From 4 August 2021 | |
| to 31 December 2022 | to 31 December 2021 | |
| EUR | EUR | |
| Statutory audit of the annual accounts | 105,888 | 67,568 |
| Audit-related fees | - | 257,984 |
| Total | 105,888 | 325,552* |
*Only EUR 67,568 was recorded as part of the operating expenses as the remaining EUR 257,984was considered as Private Placement related costs and were netted against the proceeds from thePrivate Placement (see Note 14).
The Company did not have any employees during the year ended 31 December 2022 (2021: nil).
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
7. INCOME TAXES
The reconciliation between actual and theoretical tax expense is as follows:
| From 1 January 2022 | From 4 August 2021 | |
| to 31 December 2022 | to 31 December 2021 | |
| EUR | EUR | |
| Loss for the year/period before tax | (12,758,890) | (207,450) |
| Theoretical tax charges, applying the tax rate of | (2,909,027) | 47,298 |
| 22.80% | ||
| Tax effect of adjustments from local GAAP to | 1,405,042 | 234,865 |
| IFRS1 | ||
| Unrecognized deferred tax assets | 1,503,985 | (282,163) |
| Income tax | - | - |
The tax rate used in the reconciliation above is the Luxembourgish tax rate (22.80%) as the Company is domiciled in Luxembourg. Deferred tax assets have not been recognised in respect of the loss incurred during the year ended 31 December 2022 because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom. Unused tax losses of the Company can be used within a period of 17 years as per Luxembourg tax law.
8. EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share (“EPS”) is calculated by dividing the profit/(loss) for the year by the weighted average number of ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit/(loss) for the year by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and diluted EPS calculations:
| From 1 January 2022 | From 4 August 2021 | |
| to 31 December 2022 | to 31 December 2021 | |
| Loss for the year/period | (EUR 12,758,890) | (EUR 207,450) |
| Weighted average number of ordinary shares for | 5,354,795 | 7,500,000 |
| EPS | ||
| Basic and diluted EPS | (EUR 2.38) | (EUR 0.03) |
1 Income taxes payable to / recoverable from the tax authorities are determined based on the financial results of 468 SPAC II SE and its subsidiaries as shown in their stand-alone financial statements prepared in local GAAP. Hence adjustments from local GAAP to IFRS may lead to higher / lower taxable result in the consolidated financial statements as compared to that determined based on the stand-alone financial statements.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
| From 1 January 2022 | From 4 August 2021 | |
| to 31 December 2022 | to 31 December 2021 | |
| Weighted average number of potential ordinary | ||
| shares which are antidilutive: | ||
| Redeemable Class A shares | 19,964,384 | - |
| Warrants (Class A and B) | 11,639,890 | - |
| Total | 31,604,274 | - |
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these consolidated financial statements.
9. CASH IN ESCROW
Cash in escrow of EUR 210,411,275 (2021: nil) consists of the gross proceeds from the Private Placement and Additional Sponsor Subscription. The cash held in escrow from the Additional Sponsor subscription is used to cover the negative interest on the escrow (See Note 13.1). The cash held in escrow from the gross proceeds on the Private Placement is set aside to pay the following, in case of Business Combination: i) payment of class A shares for which the redemption right was exercised, net of any interest, fees and taxes, ii) fixed deferred listing commission and if any, discretionary deferred listing commission (See Note 19), and iii) any remainder values will be returned to the Company.
If the Company does not consummate a Business Combination, the amounts standing on the escrow will be returned to the Company, and eventually to the holders of class A shares for the portion of the proceeds on the Private Placement, net of any interest, fees and taxes.
The fair value of cash in escrow approximate its carrying value as at 31 December 2022 (level 3). As at 31 December 2022, the negative interest on the cash in escrow amounts to EUR 218,725 (2021: nil) presented as finance cost in the consolidated statement of comprehensive income.
10. DEFERRED COSTS
Deferred costs of EUR 1,030,108 as at 31 December 2021 were composed mainly of legal costs and other professional fees incurred by the Company in relation to the public offering which, together with other Private Placement related costs, were offset against the proceeds of the planned Private Placement (See Note 14).
11. CASH AND CASH EQUIVALENTS
The amount of cash and cash equivalents was EUR 1,665,134 as at 31 December 2022 (2021: EUR 1,523,118).
The fair value of cash and cash equivalents approximate it’s carrying value as at 31 December 2022 and 2021 (level 3).
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
12. ISSUED CAPITAL AND RESERVES
Share capital
On 4 August 2021, the subscribed share capital amounts to EUR 120,000 consisting of 12,000,000 class B shares without nominal value.
On 24 November 2021, following the extraordinary general meeting of shareholders the Company created four share classes within the class B shares and converted the existing 12,000,000 class B shares into 375,000 class B1 shares without nominal value, 2,125,000 class B2 shares without nominal value, 2,500,000 class B3 shares without nominal value and 2,500,000 class B4 shares without nominal value.
On 17 January 2022, it was resolved to reduce the share capital of the Company by redeeming 2,250,000 class B shares for EUR 0.016 per share or EUR 36,000 in total.
Upon and following the completion of the Business Combination, the class B shares existing at that point in time shall convert into class A shares in accordance with the conversion schedule (the “Promote Conversion” in the “Glossary” of the Prospectus).
The class B shares will only have nominal economic rights (i.e., reimbursement of their par value, at best, in case of liquidation). The class B shares shall not be part of the contemplated Private Placement and will not be listed on a stock exchange.
Share capital – Class A shares
On 18 January 2022, the Company issued 21,000,000 redeemable class A shares with a par value 0.016, together with class A warrants (together, a “Unit”) for an aggregate price of EUR 10 per Unit, the nominal subscription price per class A warrant being EUR 0.01. The total proceeds allocated to class A shares, with the share premium amounts to EUR 209,930,000 before Private Placement costs. Because the class A shares are redeemable under certain conditions, the Management Board concluded that the class A shares do not meet the definition of an equity instrument as per IAS 32. Hence, the class A shares are considered as debt instruments (See Note 3 and 14).
Share premium
On 8 December 2021, it was resolved to raise additional funding to the Company in the form of an equity contribution in cash without the issuance of new shares (account 115 of the standard chart of accounts) for a total amount of EUR 1,080,000 in order to cover for operating expenses.
On 14 January 2022, the Management Board resolved to allocate EUR 121,400 from the share premium, in accordance with the articles of association to the warrant reserve (see below).
Other reserves
On 17 January 2022, the Co-Sponsors made an additional equity contribution in cash without issuance of new shares in the amount of EUR 2,070.
Authorised capital
The authorized capital, excluding the issued share capital, of the Company is set at EUR 11,607,456 consisting of 725,466,000 class A shares without nominal value.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Legal reserves
The Company is required to allocate a minimum of 5% of its annual net profit to a legal reserve, until this reserve equals 10% of the subscribed share capital. This reserve may not be distributed.
Warrant reserve
Pursuant to Article 31 of the amended Articles of Association, the Management Board shall create a specific reserve in respect of the exercise of any class A warrants or class B warrants issued by the Company (the "Warrant Reserve") and allocate and transfer sums contributed to the share premium and/or any other distributable reserve of the Company to such Warrant Reserve. The Management Board may, at any time, fully or partially convert amounts contributed to such Warrant Reserve to pay for the subscription price of any class A Shares to be issued further to an exercise of class A warrants or class B warrants issued by the Company. Only in case of failure by the Company to secure a Business Combination before the expiry of the Acquisition Period, the Warrant Reserve may be used for redemption of class A shares, in case where other available reserves are not sufficient. The Warrant Reserve is not distributable or convertible prior to the exercise, redemption or expiration of all outstanding class A warrants and class B warrants and may only be used to pay for the class A shares issued pursuant to the exercise of such class A warrants and class B warrants; thereupon, the Warrant Reserve will become a distributable reserve.
As at 31 December 2022, EUR 121,400 has been allocated to warrant reserve from Share premium (2021: nil).
13. WARRANTS
13.1 Class B warrants at fair value
| No. of class B | 31 December | 31 December | |
| warrants | 2022 | 2021 | |
| EUR | EUR | ||
| Sponsor Capital At-Risk | 4,720,000 | 8,401,600 | - |
| Additional Sponsor Subscription | 420,000 | 747,600 | - |
| Total | 5,140,000 | 9,149,200 | - |
On 11 January 2022, the Sponsors, Co-Sponsors and the Company entered into a Sponsor Warrant Purchase Agreement. The Sponsors and the Co-Sponsors agreed, to initially subscribe to class B warrants as follows:
•
4,966,667 class B warrants at a price of EUR 1.50 per warrant or EUR 7,450,000 in total for the Sponsor Capital At-Risk and;
•
500,000 class B warrants at a price of EUR 1.50 per warrant or EUR 750,000 in total for the Additional Sponsor Subscription.
On 17 January 2022, the Sponsors, Supervisory Board members and the Company entered into a Share and Warrant Repurchase Agreement, wherein the Sponsors and Supervisory Board members sold a total of 326,667 class B warrants to the Company, for a purchase price of EUR 1.50 per warrant (EUR 490,000 in total).
The Sponsor Capital At-Risk is used to finance the Company’s working capital requirements (including due diligence costs in connection with the Business Combination) and Private Placement
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
and listing expenses, except for the deferred listing commission which will be paid from the escrow account. The Additional Sponsor Subscription is used to cover the negative interest on the escrow account. For any excess portion of the Additional Sponsor Subscription remaining after the consummation of the Business Combination, the Sponsors and the Co-Sponsors may elect to either (i) request repayment of the remaining cash portion of the Additional Sponsor Subscription by redeeming the corresponding number of class B warrants subscribed for under the Additional Sponsor Subscription or (ii) keep the class B warrants subscribed for under the Additional Sponsor Subscription.
Each class B warrant entitles its holder to subscribe for one class A share, with a stated exercise price of EUR 11.50.
On the issue date, the fair value of class B warrants was determined to be EUR 1.46 per warrant using the Black-Scholes option pricing model (level 3). The breakdown are as follows:
•
Class B warrants issued as Sponsor Capital At-Risk is valued at EUR 6,891,200 and;
•
Class B warrants issued as Additional Sponsor Subscription is valued at EUR 613,200.
The above valuation resulted in the recognition of a day-one gain of EUR 205,600.
As at 31 December 2022, the fair value of class B warrants were determined to be EUR 1.78 per warrant using the Black-Scholes option pricing model (level 3). The breakdown are as follows:
•
Class B warrants issued as Sponsor Capital At-Risk is valued at EUR 8,401,600 and;
•
Class B warrants issued as Additional Sponsor Subscription is valued at EUR 747,600.
The above valuation resulted in the recognition of fair value loss of EUR 1,644,800 for the period from the issue date to the closing date, and a net fair value loss of EUR 1,439,200 for the year ended 31 December 2022. The significant inputs to the valuation model include the contractual terms of the warrants (i.e. exercise price, maturity), risk-free rates of German government bonds and equity volatility.
Class B warrants are identical to the class A warrants underlying the Units sold in the Private Placement, except that the class B warrants are not redeemable and may always be exercised on a cashless basis while held by the Sponsor or their Permitted Transferees (defined in the prospectus). Class B warrants are not part of the Private Placement and are not listed on a stock exchange.
13.2 Class A warrants at fair value
On 18 January 2022, the Company issued 7,000,000 class A warrants (the “Class A warrants”) together with the class A shares (together, a “Unit”) for an aggregate price of EUR 10 per Unit, the nominal subscription price per Class A warrant being EUR 0.01. Hence, total proceeds in relation to the issue of the warrants amount to EUR 70,000. Class A warrants has International Securities Identification Number (“ISIN”) LU2380748785. Each Class A warrant entitles its holder to subscribe for one Class A share, with a stated exercise price of EUR 11.50, subject to customary anti-dilution adjustments. Holders of Class A warrants can exercise the warrants on a cashless basis unless the Company elects to require exercise against payment in cash of the exercise price.
On the issue date, the fair value of Class A warrants was estimated at EUR 4,830,000 (EUR 0.69 per warrant) using Monte Carlo valuation model (level 3), resulting in the recognition of a day-one loss of EUR 4,760,000.
As at 31 December 2022, the fair value of Class A warrants was estimated to be EUR 5,460,000 (EUR 0.78 per warrant) using Monte Carlo valuation model (level 3), resulting in the recognition of fair value loss of EUR 630,000 for the period from the issue date to the closing date and a net fair value loss of EUR 5,390,000 for the year ended 31 December 2022. The significant inputs to the valuation model include the contractual terms of the warrants (i.e. exercise price, maturity), risk-free rates of German government bonds and volatility of the warrants by reference to traded warrants issued by similar listed special purpose acquisition companies.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Class A warrants may only be exercised for a whole number of class A shares. Class A warrants will become exercisable 30 days after the completion of a Business Combination. Class A warrants will expire five years from the date of the consummation of the Business Combination, or earlier upon redemption or liquidation. The Company may redeem Class A warrants upon at least 30 days’ notice at a redemption price of EUR 0.01 per Class A warrant if (i) the closing price of its class A shares for any 20 out of the 30 consecutive trading days following the consummation of the Business combination equals or exceeds EUR 18.00 or (ii) the closing price of its class A shares for any 20 out of the 30 consecutive trading days following the consummation of the Business Combination equals or exceeds EUR 10.00 but is below EUR 18.00, adjusted for adjustments as described in the section of redemption of warrants in the prospectus. Holders of Class A warrants may exercise them after the redemption notice is given.
14. REDEEMABLE CLASS A SHARES
On 18 January 2022, the Company issued 21,000,000 redeemable class A shares (the “Class A shares”) with a par value of EUR 0.016, with ISIN code LU2380748603. The Class A shares are issued together with the Class A warrants (together, a “Unit”) for an aggregate price of EUR 10 per Unit. Holders of Class A shares are entitled to one vote for each share. On the issue date, the redeemable Class A shares is measured at amortised cost valued at EUR 205,849,130, net of transaction costs amounting to EUR 4,080,870.
Transaction costs, which are incremental costs that are directly attributable to the issuance of the Class A shares and its subsequent listing to the Frankfurt Stock Exchange, were deducted from its initial fair value. The transaction costs includes Listing Fee (See Note 19), legal fees, audit fees, accounting and administration fees, agency fees and CSSF fees.
As at 31 December 2022, the amortized cost of the redeemable Class A shares amounts to EUR 208,437,072 after amortisation of EUR 2,587,942 calculated using the EIR method. This amortization is presented as part of finance cost in the consolidated statement of comprehensive income. As at 31 December 2022, the fair value of Redeemable Class A shares is estimated at EUR 210,000,000 which is the nominal value of the redemption price of the shares (level 3).
Class A Shareholders may request redemption of all or a portion of their Class A shares in connection with the Business Combination, subject to the conditions and procedures set forth in the Articles of Association. Class A shares will only be redeemed under the following conditions, (i) the Business Combination is approved by the general meeting of shareholders and subsequently consummated, (ii) a holder of Class A shares notifies the Company of its request to redeem a portion or all of its Class A shares in writing by completing a form approved by the Management Board for this purpose that will be included with the convening notice for the general meeting of shareholders and such notification is received by the Company not earlier than the publication of the notice convening the general meeting of shareholders for the approval of the Business Combination and (iii) the holder of Class A shares transfers its Class A shares to a trust depositary account specified by the Company, (ii) and (iii) both not later than two business days prior to the date of the general meeting of shareholders convened for the purpose of approving the Business Combination.
Each Class A share that is redeemed shall be redeemed in cash for a price equal to the aggregate amount on deposit in the escrow account related to the proceeds from the Private Placement of the Class A shares and warrants, divided by the number of the then outstanding Class A Shares, subject to (i) the availability of sufficient amounts on the escrow account and (ii) sufficient distributable profits and reserves of the Company.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Because the Class A Shares are redeemable under certain conditions, the Management Board concluded that the Class A shares do not meet the definition of an equity instrument as per IAS 32. Hence, the Class A shares are considered as debt instruments (See Note 3).
15. PAYABLES TO RELATED PARTIES
15.1 Shareholder loan
The Company as the borrower concluded a loan agreement with the Sponsor as the lender with effect on 4 August 2021 (“Shareholder Loan”). It was agreed for the loan to be utilized for the purpose of financing third party costs and other working capital requirements until the intended Private Placement. A loan amount of up to EUR 250,000 has been granted to the Company. The loan bears annual interest rate of 2.00% and will mature on the following business day one year after the end of the earlier of (i) 30 months following the Private Placement or (ii) three months after completion of the Business Combination.
As at 31 December 2021, EUR 34,500 had been drawn by the Company from the Shareholder Loan. Total interest expense amounted to EUR 11 for the year ended 31 December 2022 (2021: EUR 242). On 10 January 2022, the Company paid the full amount including total interest amounting to EUR 253. The fair value of the Shareholder Loan approximated its carrying value as at 31 December 2021 (level 3).
15.2 Advances from Sponsors
In December 2021, the Co-Sponsors advanced a total amount of EUR 367,359 for the warrant subscription, of which EUR 326,658 had been applied against the warrant purchase price (See Note 13.1). On 9 June 2022, the Company paid back the remaining advances amounting to EUR 40,701. The advances bear no interest.
The fair value of the Advances from Sponsors approximates its carrying amount value as at 31 December 2022 (level 3).
15.3 Payable to directors
The Management Board and Supervisory Board received remuneration during the year ended 31 December 2022 as disclosed in Note 6. The outstanding balance as at 31 December 2022 amounted to EUR 157,875 (2021: nil).
16. TRADE AND OTHER PAYABLES
Trade and other payables amount to EUR 692,613 as at 31 December 2022 (2021: EUR 1,158,575).
Trade and other payables are related to legal and other services received by the Group. The carrying amount of these approximate their fair value (level 3) as at 31 December 2022 and 2021.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
17. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group conducted no operations and currently generated no revenue. They do not have any foreign currency transactions. Hence, currently the Group does not face foreign currency risks nor any interest rate risks as the financial instruments of the Group bear a fixed interest rate.
Liquidity risks
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Company has completed its Private Placement and listing on the Frankfurt Stock exchange. The proceeds from the Private Placement as well as the Additional Sponsor Subscription is deposited in an escrow account. The amount held in the escrow account will only be released in connection with the completion of the Business Combination or the Company’s liquidation. As at 31 December 2022, the Management Board believes that the funds available to the Group outside of the secured deposit account are sufficient to pay costs and expenses incurred by the Group prior to the completion of the BusinessCombination. Furthermore, the Group has financial instruments which are presented as non- current liabilities which does not impose any liquidity issues to the Group. The class B warrants designated as Sponsor Capital At-Risk amounting to EUR 8,401,600 (See Note 13.1) have no redemption rights or liquidation distribution rights and will expire worthless in case of liquidation. Furthermore, the Class A warrants amounting to EUR 5,460,000 are redeemable at the option of the Company (See Note 13.2).
The maturity of Group’s financial liabilities, excluding the warrants as described above, based oncontractual undiscounted payments amounting to EUR 850,488 (2021: EUR 1,560,676) will maturein less than 3 months, and the redeemable class A shares in the amount of EUR 210,000,000 is duewithin 3 to 12 months from the reporting date.
Capital management
The Management Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. In order to meet the capital management objective described above, the Group has raised funds through a Private Placement reserved to certain qualified investors inside and outside of Germany, and had the Class A shares and Class A warrants issued in the context of this Private Placement admitted to listing and trading on the Frankfurt Stock Exchange. The above-mentioned financial instruments issued as part of this Private Placement represent what the entity is managing as capital, although these instruments are considered as debt instruments from an accounting standpoint.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is currently exposed to credit risk from its financing activities, including deposits with banks and financial institutions. No specific counterparty risk is being assessed as cash and cash equivalents are mostly deposited with a P-1 (Moody’s) or A-2 (S&P’s) rated bank.
18. RELATED PARTIES DISCLOSURES
Parties are considered to be related if one party has the ability to control the other or exercise significant influence over the other party in making financial or operational decisions.
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468 SPAC II SE
Notes to the consolidated financial statements for the
year ended 31 December 2022
Terms and conditions of transactions with related parties
There have been no guarantees provided or received for any related party receivables or payables as at 31 December 2022. Please see Note 15 for the related party balances outstanding as at 31 December 2022 and 2021.
Commitments with related parties
There are no commitments with related parties, except for the provision of basic capitalization by the Parent to its subsidiaries as follows:
•
To 468 II Advisors KG in the amount of EUR 700,000.
Transactions with key management personnel
There are no advances or loans granted to members of the Management Board as at 31 December 2022 and 2021.
The Management Board and Supervisory Board received remuneration during the year ended 31 December 2022 in the amount of EUR 699,173 (2021: nil) as disclosed in Note 6. The outstanding balance as at 31 December 2022 amounted to EUR 157,875 (2021: nil).
19. COMMITMENTS AND CONTINGENCIES
On 13 January 2022, the Company entered into an underwriting agreement with John Berenberg, Gossler & Co. KG (“Berenberg”), as the sole global coordinator and sole bookrunner in the context of the Private Placement. Under this agreement, the Company paid a listing fee of 1.2% of the gross proceeds from the Private Placement on the date of the completion of the Private Placement (the “Listing Fee”) and is liable to pay a deferred listing commission of 2.5% on the gross proceeds from the Private Placement on the completion of the Business Combination (the “Deferred Listing Commission”).
The Group has no other commitments and contingencies as at 31 December 2022.
20. EVENTS AFTER THE REPORTING PERIOD
The Company has signed a Business Combination Agreement with a target and the shareholders are expected to approve the Business Combination on the annual general meeting.
There are no other events or conditions after the reporting year requiring disclosure in or adjustment to the consolidated financial statements.
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