EDGAR 10-K Filing

Company CIK: 1856161
Filing Year: 2024
Filename: 1856161_10-K_2024_0001829126-24-002578.json

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ITEM 1. BUSINESS
Item 1. Business.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.

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ITEM 2. PROPERTIES
Item 2. Properties.
We currently maintain our executive offices at 767 Third Avenue, 11th Floor, New York, New York 10017. The cost for this space is included in the $15,000 per month fee that we pay our Sponsor for office space, administrative and support services. We consider our current office space adequate for our current operations.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
None.
Part II.

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
(a) Market Information
Our Units began trading on The Nasdaq Stock Market LLC (“Nasdaq”) on December 15, 2021. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant to purchase one Class A ordinary share. On February 3, 2022, we announced that holders of the Units may elect to separately trade the Class A ordinary shares and redeemable warrants included in the Units commencing on February 4. 2022. Any Units not separated continue to trade on Nasdaq under the symbol “PRLHU”. Any underlying Class A ordinary shares and redeemable warrants that were separated trade on Nasdaq under the symbols “PRLH” and “PRLHW,” respectively.
(b) Holders
As of April 16, 2024, there was one holder of record of our Units, two holders of record of our separately traded Class A ordinary shares, and two holders of record of our redeemable warrants.
(c) Dividends
We have not paid any cash dividends on our Class A ordinary shares to date and do not intend to pay cash dividends prior to the completion of our initial Business Combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of our initial Business Combination. The payment of any cash dividends subsequent to our initial Business Combination will be within the discretion of our board of directors at such time. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share dividends in the foreseeable future. Further, if we incur any indebtedness in connection with our initial Business Combination, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.
(d) Securities Authorized for Issuance Under Equity Compensation Plans
None.
(e) Performance Graph
The performance graph has been omitted as permitted under rules applicable to smaller reporting companies.
(f) Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings
Unregistered Sales
Founder Shares
On April 3, 2021, our Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. “Founder Shares” as used herein refer to our Class B ordinary shares initially purchased by our Sponsor and our Class A ordinary shares that will be issued upon the conversion thereof. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. On December 22, 2021, due to the partial exercise of the over-allotment option by the underwriter of the Initial Public Offering, the Sponsor forfeited 31,250 Class B Ordinary Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
Private Placement
Simultaneously with the closing of our Initial Public Offering, our Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. In connection with the underwriter’s partial exercise of its option to purchase additional Units, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, generating gross proceeds to the Company of $1,000,000.
The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts or commissions were paid with respect to such sales.
Use of Proceeds
On December 17, 2021, the Company consummated its Initial Public Offering of 17,500,000 Units at $10.00 per Unit, generating gross proceeds of $175,000,000. Morgan Stanley & Co. LLC acted as sole book-running manager for the Initial Public Offering. The securities sold in the Initial Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-261319). The SEC declared the registration statements effective on December 14, 2021. On December 20, 2021 the underwriter partially exercised its over-allotment option and stated its intention to purchase an additional 2,500,000 of the 2,625,000 over-allotment Units available, generating gross proceeds of $25,000,000. The over-allotment closed on December 22, 2021.
Simultaneously with the closing of our Initial Public Offering, our Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. In connection with the underwriter’s partial exercise of its option to purchase additional Units, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, generating gross proceeds to the Company of $1,000,000.
In connection with the Public Offerings (including the Initial Public Offering and exercise of over-allotment option), we incurred offering costs of approximately $11,712,588 (including deferred underwriting commissions of $7,000,000). Other incurred offering costs consisted principally of preparation fees related to the Initial Public Offering. After deducting the underwriting discounts and commissions (excluding the deferred portion, which amount will be payable upon consummation of the initial Business Combination, if consummated) and the Initial Public Offering expenses, $204,000,000 of the net proceeds from our Initial Public Offering and certain of the proceeds from the Private Placement of the Private Placement Warrants (or $10.20 per Unit sold in the Initial Public Offering) was placed in the Trust Account. The net proceeds of the Initial Public Offering and certain proceeds from the sale of the Private Placement Warrants are held in the Trust Account and invested as described elsewhere in this Annual Report on Form 10-K.
There has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus related to the Initial Public Offering. For a description of the use of the proceeds generated from the Initial Public Offering, see “Item 1. Business.”

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved].

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
References to the “Company,” “our,” “us” or “we” refer to Pearl Holdings Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the audited financial statements and the notes related thereto which are included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements and Risk Factor Summary,” “Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Overview
We are a blank check company, incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. We intend to effectuate our initial business combination using cash from the proceeds of the offering and the sale of the private placement warrants, our shares, debt or a combination of cash, shares and debt.
The issuance of additional ordinary shares or preference shares in a business combination:
● may significantly dilute the equity interest of investors, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one basis upon conversion of the Class B ordinary shares;
● may subordinate the rights of holders of ordinary shares if preference shares are issued with rights senior to those afforded our ordinary shares;
● could cause a change of control if a substantial number of our ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
● may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
● may adversely affect prevailing market prices for our units, ordinary shares and/or warrants; and
● may not result in adjustment to the exercise price of our warrants.
Similarly, if we issue debt or otherwise incur significant indebtedness, it could result in:
● default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations;
● acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
● our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
● our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
● our inability to pay dividends on our ordinary shares;
● using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
● limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
● increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; and
● limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
As indicated in the accompanying financial statements, at December 31, 2023 we had cash of $30,793 outside of our trust account and working capital deficit of $891,588. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to raise capital or to complete our initial business combination will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern.
Recent Developments
On January 5, 2024 upon receipt of a notice of conversion from the Sponsor pursuant to Article 17.2 of the Company’s amended and restated articles of association, the Company converted 3,000,000 of its Class B ordinary shares to Class A ordinary shares on a one-for-one basis. The Sponsor waived any right to receive funds from the Trust Account with respect to the Class A ordinary shares received upon such conversion and no additional amounts were deposited into the Trust Account in respect of any of those Class A ordinary shares. It is stipulated that the newly converted Class A ordinary shares shall be subject to the same lock-up provisions as the original Class B ordinary shares.
On February 22, 2024, The Company entered into a subscription agreement (the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (“Polar”), pursuant to which, and on the terms and subject to the conditions of which, Polar agreed to contribute up to $500,000 in cash to the Company (the “Capital Contribution”) to cover working capital expenses. In consideration of the Capital Contribution, the Company agreed to issue, or to cause the surviving entity of an initial business combination to issue, one Class A ordinary share (“Common Stock”) for each dollar of the Capital Contribution funded by Polar and received by the Company at or prior to an initial business combination closing (such funded amount, the “Capital Investment”), such Common Stock to be issued no later than two business days following an initial business combination closing (a “De-SPAC Closing”). The Capital Investment is required to be repaid by the Company to Polar upon a De-SPAC Closing, and Polar may elect to receive that repayment either (i) in cash or (ii) in Common Stock at a rate of one share of Common Stock for each $10.00 of Capital Investment. The Company and Sponsor are jointly and severally obligated for such repayment of the Capital Investment upon a De-SPAC Closing. In the event that the Company liquidates without consummating an initial business combination, any amounts remaining in Sponsor’s or the Company’s cash accounts, not including the Company’s trust account, would be applied to the repayment of the Capital Investment, in full satisfaction of any amounts due under the Subscription Agreement.
On February 22, 2024, the Company entered into additional subscription agreements (the “Additional Subscription Agreements”) with five other parties for additional Capital Contributions in the aggregate of $282,000. The terms of the Additional Subscription Agreements are identical to the Subscription Agreement entered into with Polar above.
On March 26, 2024, the Company amended the Investment Management Trust Agreement (the “Trust Agreement”), where, Section 1(c) of the trust agreement was amended and restated in its entirety. As per the amendment, at the written request of the Company, all amounts held in trust are to be deposited in an interest-bearing bank demand deposit account with a maturity of 185 days or less, or in money market funds governed by the Investment Company Act of 1940. On March 26, 2024, the Company transferred substantially all of the assets held in the Trust Account to a demand deposit account held by the Trustee.
Results of Operations
For the year ended December 31, 2023, we had a net income of $8,645,953 which consists of earnings on investments held in Trust Account amounting to $9,889,565, offset by operating costs amounting to $1,243,612.
For the year ended December 31, 2022, we had a net income of $2,040,450 which consists of earnings on investments held in Trust Account amounting to $2,887,145, offset by formation and operating costs amounting to $846,695.
Our business activities as of December 31, 2023 consisted primarily of identifying and evaluating prospective acquisition targets for a Business Combination.
Liquidity and Capital Resources
On December 17, 2021 the IPO was completed and the net proceeds from (1) the sale of the units in the offering and the over-allotment, after deducting payment of accrued offering expenses of approximately $712,588 and underwriting commissions of $4,000,000, excluding deferred underwriting commissions of $7,000,000 and (2) the sale of the private placement warrants for a purchase price of $10,000,000 was $205,287,412. Of this amount, $204,000,000 was deposited into the trust account. The funds in the trust account are invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries. The remaining proceeds of $1,287,412 as of the IPO date were not held in the trust account.
We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our initial business combination. We may withdraw interest to pay taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the trust account. We expect the interest earned on the amount in the trust account will be sufficient to pay our taxes. We expect the only taxes payable by us out of the funds in the trust account will be income and franchise taxes, if any. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
As of December 31, 2023, we had cash of $30,793 held outside of our trust account. We will use these funds primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a business combination, and to pay taxes to the extent the interest earned on the trust account is not sufficient to pay our taxes.
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.
In addition, we could use a portion of the funds not being placed in trust to pay commitment fees for financing, fees to consultants to assist us with our search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of our available funds at the time. Our forfeiture of such funds (whether as a result of our breach or otherwise) could result in our not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed. The Company cannot assure that its plans to consummate an initial Business Combination will be successful.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Related Party Transactions
On April 3, 2021, our sponsor paid $25,000 to cover certain of our offering and formation costs in exchange for the issuance of 7,187,500 founder shares to our sponsor, or approximately $0.003 per share. In November 2021, our sponsor surrendered an aggregate of 2,156,250 founder shares for no consideration, thereby reducing the aggregate number of founder shares outstanding to 5,031,250. On December 22, 2021 our sponsor surrendered an additional 31,250 upon the partial exercise of the underwriter’s over-allotment option, thereby reducing the aggregate number of founder shares to 5,000,000 and resulting in an effective purchase price paid for the founder shares of approximately $0.005 per share. The purchase price of the founder shares was determined by dividing the amount of cash contributed to us by the number of founder shares issued. Our initial shareholders collectively own 20% of our issued and outstanding shares.
We have entered into a support services agreement pursuant to which we will also pay our sponsor a total of $15,000 per month for office space, administrative and support services. Upon completion of our initial business combination or our liquidation, we will cease paying these monthly fees. As of December 31, 2023 and 2022, the Company incurred $180,000 of administrative services fees. As of December 31, 2023 and 2022, the amount due to sponsor for these administrative services fees are $143,709 and $38,709 as reflected in Due to Related Party in the accompanying balance sheets, respectively.
Our sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, directors, officers or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
In addition, in order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of our sponsor or certain of our directors and officers may, but are not obligated to, loan us funds as may be required. If we complete our initial business combination, we may repay such loaned amounts out of the proceeds of the trust account released to us. Otherwise, such loans may be repaid only out of funds held outside the trust account. In the event that our initial business combination does not close, we may use a portion of the working capital held outside the trust account to repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $2,000,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the private placement warrants issued to our sponsor. The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and 2022, the Company had no borrowings under the Working Capital Loans.
Our sponsor purchased an aggregate of 10,000,000 private placement warrants at a price of $1.00 per warrant. The private placement warrants are identical to the warrants sold as part of the units in the offering except that: (1) the private placement warrants will not be redeemable by us; (2) the Class A ordinary shares issuable upon exercise of the private placement warrants may be subject to certain transfer restrictions contained in the letter agreement by and among us, the sponsor and any other parties thereto, as amended from time to time; (3) the private placement warrants may be exercised by the holders on a cashless basis; and (4) the holders of private placement warrants (including the ordinary shares issuable upon exercise of such warrants) are entitled to registration rights.
Pursuant to a registration rights agreement that we entered into with our initial shareholders prior to the closing of the offering, we may be required to register certain securities for sale under the Securities Act. These holders, and holders of warrants issued upon conversion of working capital loans, if any, are entitled under the registration rights agreement to make up to three demands that we register certain of our securities held by them for sale under the Securities Act and to have the securities covered thereby registered for resale pursuant to Rule 415 under the Securities Act. In addition, these holders have the right to include their securities in other registration statements filed by us. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until the securities covered thereby are released from their lock-up restrictions, as described herein. We will bear the costs and expenses of filing any such registration statements.
Contractual Obligations
Commencing on the date that the Company’s securities were first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, we agreed to pay our Sponsor a total of $15,000 per month for office space, utilities, administrative and support services.
The holders of Founder Shares, Private Placement Warrants, and any warrant that may be issued upon conversion of Working Capital Loans, if any, will be entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, these holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Shareholders - Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.
The underwriters are entitled to a deferred underwriting discount of 3.50% of the gross proceeds of the Initial Public Offering, or $7,000,000. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.
JOBS Act
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Critical Accounting Policies and Estimates
This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management has not identified any critical accounting estimates.
Item 7.A. Quantitative and Qualitative Disclosure About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 8. Financial Statements and Supplementary Data
This information appears following Item 16 of this Report and is included herein by reference.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9.A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to material weaknesses in our internal controls over financial reporting.
Management’s Report on Internal Controls Over Financial Reporting
As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2023. During the audit of the financial statements for the year ended December 31, 2022, a material weakness was identified related to the fact that we have not designed or maintained controls over the financial reporting close process which resulted in an error in the classification of investing activities in the statement of cash flows. During the audit of the financial statements for the year ended December 31, 2023, a material weakness was identified in our internal control over financial reporting related to the fact that we have not designed or maintained controls over the accounting for complex financial instruments, specifically the Non-Redemption Agreements. These material weaknesses continue to exist as of December 31, 2023. Management performed additional procedures as deemed necessary to ensure the financial statements were prepared in accordance with U.S. GAAP for the year end December 31, 2023.
We have implemented remediation steps pertaining to the material weakness for the year ended December 31, 2022, including review of the third-party professional who we consult with in the preparation of our financial statements, as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-K are presented fairly in all material respects.
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control, other than the material weakness discussed above, over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9.B. Other Information.
During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K.11
Item 9.C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.
Not Applicable.
Note to Company: Please confirm.
Part III.
Item 10. Directors, Executive Officers and Corporate Governance.12
Our current directors and executive officer are as follows:
Name
Age
Title
Craig E. Barnett
Chief Executive Officer and Chairman
Terry Duddy
Vice Chairman and Director
Martin F. Lewis
Managing Director and Chief Financial Officer
Scott M. Napolitano
Managing Director
James E. Lieber
Director
Mary C. Tanner
Director
Laura A. Weil
Director
Craig E. Barnett has been our Chairman and Chief Executive Officer since May 2021. Mr. Barnett has been the Chief Executive Officer of Meadow Lane since 2014 and its associated broker-dealer and predecessor entities since inception and established and manages the global investment team. Mr. Barnett has over 35 years of experience in investment banking, private equity and corporate development and is responsible for Meadow Lane’s partnerships with financing and investment firms. Mr. Barnett has advised clients, pursued investments and overseen corporate development and finance activities with aggregate values exceeding $60 billion primarily in the consumer sectors of the global economy in the United States, Europe and Asia. In addition, Mr. Barnett has been highly active in corporate development, financing and acquisitions for GUS, Experian, Burberry, Argos, Arcade and Shaklee. Previously, Mr. Barnett was a senior executive in private equity and investment banking. He was a Managing Director with Blackstone, a Managing Director with The Bear Stearns Companies, Inc. and a Managing Director with PJ Solomon. Earlier in his career, Mr. Barnett was a Vice President at Lehman Brothers, in London, Tokyo and New York. Mr. Barnett, a graduate of the Wharton School, is active in a number of charitable and community organizations. Mr. Barnett was selected to serve on our board of directors due to his over 35 years of experience in corporate development, financing transactions and mergers and acquisitions.
Terry Duddy has been our Vice Chairman and a member of our board of directors since May 2021. Mr. Duddy has over 30 years of leadership experience with public companies and is a seasoned Chief Executive and digital commerce pioneer. Mr. Duddy has also worked with Meadow Lane principals for over 20 years. Mr. Duddy was a Director and member of the Executive Committee of GUS from 1998 to 2006, having joined as the Chief Executive Officer of Argos. Mr. Duddy was also responsible for the pan-European home shopping division of GUS that, though loss making, was eventually divested for over £800 million. Mr. Duddy was furthermore a member of the GUS board of directors’ Demerger Committee that presided over the demerger process of GUS that included the successful initial public offerings of Burberry, Experian and Home Retail Group. As Chief Executive Officer of Argos and its successor independent entity, Home Retail Group, from 1998 to 2014, Mr. Duddy guided the business through both the extensive digital transformation of the industry as well as the downturn of 2009. Argos was the UK’s first multichannel retailer with its e-commerce site and home delivery service launching in 1999 with over 20,000 product lines and a considerable private label brand. Mr. Duddy managed a $2 billion supply chain sourced from China, incubated emerging products, created new marketing technologies including the now ubiquitous and innovative “Click & Collect” sale and mentored a new generation of managers now in industry leadership positions. Most recently, Mr. Duddy was first Senior Independent Director and then Interim Board Chairman of Debenhams plc, which he managed through administration, secured financing for a successful reorganization and recruited a new Board. Mr. Duddy has been a member of True Capital Management’s advisory board since 2014, is the Chairman of London Marathon Events Ltd and is or has been a non-executive director of a number of other companies including Hammerson plc and Majid Al Futtaim Properties LLC. Mr. Duddy was selected to serve on our board of directors due to his lengthy and comprehensive experience in public company governance as both a director and an executive officer.
Note to Pearl: Have there been any updates to the director bios below? Have any of the directors worked on additional subsequent SPACs? We will need to add the updates in the conflicts of interest disclosure.
Martin F. Lewis has been our Chief Financial Officer and one of our Managing Directors since May 2021. Mr. Lewis has over 35 years of leadership experience in investment banking. He is the founder and Managing Principal, since 2014, of Gower Advisers, a financial advisory boutique in New York. He has also served as a Managing Principal of Meadow Lane since 2014. Previously, Mr. Lewis was a Managing Director with Greenhill, a founding member of Miller, Buckfire Lewis & Co (now Miller Buckfire), a Managing Director of Wasserstein Perella and a Managing Director of Blackstone. Mr. Lewis was also associated with Chemical Bank in London and New York and with NM Rothschild in London and Mexico. Mr. Lewis qualified as a Chartered Accountant in the UK and graduated with an M.A. from Oxford University.
Scott M. Napolitano has been one of our Managing Directors since May 2021. Mr. Napolitano has over 20 years of experience in investment banking acting as strategic and capital advisor to companies and private equity firms, principally in the healthcare and consumer sectors, evaluating mergers, acquisitions and strategic and financing alternatives. Mr. Napolitano is Managing Member of Scott Michael Partners LLC, an advisory and investment firm he founded in 2020 with a focus on healthcare and technology. Prior to founding Scott Michael Partners LLC, Mr. Napolitano served as Managing Director with Nomura Securities International from 2014 to 2020 where he was Head of MedTech Investment Banking and Healthcare M&A. Previously, he was a Managing Principal with Meadow Lane. Mr. Napolitano has also held senior investment banking positions with PJ Solomon, where he served as Managing Director and with The Goldman Sachs Group, Inc. and J.P. Morgan Chase & Co., where he served as Vice President. Mr. Napolitano is a graduate of Columbia University.
James E. Lieber has served as one of our directors since December 2021. Mr. Lieber has more than 25 years of experience in the strategic management of complex international projects and situations for multi-national corporations, investment funds, organizations and high net-worth individuals in Europe and the United States. Mr. Lieber is Founder and President of Lieber Strategies, a consultancy based in Paris. Prior to founding Lieber Strategies in 2004, Mr. Lieber served from 1997 to 2004 as Director of Corporate Affairs at LVMH, working with its chairman, Bernard Arnault, and his executive committee on major strategic projects. Mr. Lieber directed LVMH’s strategy in several multi-billion-dollar transactions and business conflicts and managed LVMH’s interests in international trade disputes and European competition clearance situations and other government relations matters. Before joining LVMH, Mr. Lieber practiced law with Cleary, Gottlieb, Steen & Hamilton LLP, where he worked in New York on international securities offerings, privatizations and real estate transactions, and in Paris representing clients in cross-border acquisitions and joint ventures in the media, luxury goods and pharmaceuticals sectors. Mr. Lieber is a director of numerous companies, including LVMH Moet Hennessy Louis Vuitton Inc., DFS Group and Gabriel Resources Ltd. He was formerly a director of Stanhope Capital Group, a private wealth manager and of Cheyne Capital Holdings, a hedge fund group. He is also a director of not for profit organizations including the French-American Foundation and Literacy Inc. and is a member of Panthera’s Conservation Council and a Friend of the Foundation for Jewish Heritage. Mr. Lieber is an attorney admitted to practice in the State of New York and a member of the Council on Foreign Relations and the Global Advisory Council of the Woodrow Wilson Center for International Scholars. Mr. Lieber holds a Juris Doctor degree cum laude from Northwestern University School of Law in Chicago, Illinois, where he was a member of the Order of the Coif, and a Master in Public Policy from Harvard University’s Kennedy School of Government, in Cambridge, Massachusetts. He received his Bachelor of Arts from Wesleyan University in Middletown, Connecticut, with honors in art history. Mr. Lieber was selected to serve on our board of directors due to his extensive experience as a strategic advisor to multinational businesses and his experience as a board member of public and private companies.
Mary C. Tanner has served as one of our directors since December 2021. Ms. Tanner has more than 30 years of leadership experience in investment banking and has served as a director on numerous private and public companies. Ms. Tanner is Senior Managing Director of ELSP, of which she is a co-founder. Ms. Tanner specializes in healthcare investment and strategic advisory work, including mergers and acquisitions, licensing, corporate minority strategic investments and fund raising. Ms. Tanner is also an active venture capital investor. Before founding ELSP with her husband and long standing business partner, Frederick Frank, Ms. Tanner held leadership positions for over 20 years in investment banking at Lehman Brothers, Bear Stearns and PJ Solomon. Ms. Tanner has directed over 500 mergers and acquisitions, over 130 initial public offerings and hundreds of financings and is highly experienced in mergers involving spinoffs of public companies. Ms. Tanner has significant expertise in life sciences, traditional pharmaceutical industries and consumer healthcare. Advisory clients of Ms. Tanner have included Pfizer Inc., Block Drug, Amgen Inc., Rhône-Poulenc S.A., Marion Merrell Dow, Inc., BASF SE, Sanofi S.A., Revlon, Inc., Fabergé and L’Oréal S.A. Ms. Tanner was a 10-year member of the board of directors of Lineagen, Inc., a molecular diagnostic company, which was merged with Bionano Genomics, Inc. in 2021, and she
was Chair of its Audit and Compliance Committee. As a member of the board of directors of Genticel, S.A., an immune oncology company in France, she assisted in merging the company with Genkyotex, a Swiss/French publicly listed company, in a cross border transaction with Calliditas Therapeutics AB, a Swedish, Nasdaq-listed company. Previously, for a decade, she served on the board of directors of Evotec SE, a German company which is one of the largest companies in early stage contract research organization research. Ms. Tanner previously served on the board of directors of the consumer products company Block Drug prior to its sale to GlaxoSmithKline plc.
Ms. Tanner received a B.A. magna cum laude from Harvard University. She serves on the Advisory Board of the Yale School of Management and recently stepped down as an advisor to the Blavatnik Fund for Innovation at Yale and the Yale Center for Biomedical Innovation and Technology. Ms. Tanner was selected to serve on our board of directors due to her extensive experience directing mergers and acquisitions and serving on public company boards of directors.
Laura A. Weil has served as one of our directors since December 2021. Ms. Weil has over 25 years of corporate leadership experience. Ms. Weil has been an independent director of Carnival Corporation since 2007. She is the chair of the audit committee and a member of the compliance and compensation committees. She is also an independent director of Global Fashion Group, SA since 2019 and the chair of its audit committee. She previously served as a Director of Christopher & Banks Corporation. Ms. Weil is the Founder and has been the Managing Partner of Village Lane Advisory LLC, which specializes in providing executive and strategic consulting services to retailers as well as private equity firms, since 2015. Previously, Ms. Weil was the Executive Vice President and Chief Operating Officer of New York & Company, Inc., the Chief Executive Officer of Ashley Stewart LLC, the Chief Executive Officer of Urban Brands, Inc., the Chief Operating Officer of AnnTaylor Stores Corporation, the Chief Financial Officer of American Eagle Outfitters, Inc., and the Vice President Finance and CFO Credit Operations for Macy’s Inc. Ms. Weil was also a senior executive with investment banking firms including Oppenheimer and Lehman Brothers. Ms. Weil received a B.A. in Art History and Government from Smith College and an MBA from Columbia University Business School. Ms. Weil was selected to serve on our board of directors due to her extensive financial expertise and substantial experience in public company governance as a director and an executive officer.
Advisory Board
In addition to our team described above, the following individuals serve on our advisory board:
Victor J. Barnett has considerable experience as a successful investor in and leader of multiple global businesses. Mr. Barnett was a Director and member of the Executive Committee directing the affairs of GUS for over 20 years. Mr. Barnett also served as the Executive Chairman of Burberry and was the chief visionary for its operational reorganization and transformation. Mr. Barnett also led the global expansion, via $2.7 billion of acquisitions, of Experian. Mr. Barnett was previously a Director of Revlon and of various other private companies.
David C. Blatte has over 30 years of investment banking and private equity investing experience in the consumer and retail industry sectors. He is also a seasoned operating executive in the pet industry. He is the Chairman of Worldwise, Inc., one of the five largest pet accessory companies in the U.S., and was the Founder and CEO of Quaker Pet Group, one of Worldwise’s operating businesses. Mr. Blatte is a former Partner at Centre Partners, a former Partner at Catterton Partners, and a former Managing Director at Donaldson Lufkin & Jenrette Securities Corp. He holds a B.S. from the Wharton School of Business of the University of Pennsylvania.
Noah Gottdiener has 35 years of corporate leadership and investment banking experience. Mr. Gottdiener is the Executive Chairman of Kroll, formerly Duff & Phelps Corp., and chairs Kroll’s board of directors. He served as Chief Executive Officer and Chairman of the Board from 2004 to 2020. During that time, revenue increased from $30 million in 2004 to over $1 billion. Kroll has nearly 5,000 professionals in 30 countries and territories around the world. Mr. Gottdiener guided Kroll through a series of acquisitions, an initial public offering and a subsequent going private transaction. In April 2020, Mr. Gottdiener led Kroll through a $4.2 billion acquisition by a global investor consortium. Previously, Mr. Gottdiener was a Partner with Thomas Weisel Partners and Furman Selz LLC, and a Managing Director at Lehman Brothers Holdings Inc., where he began his career. Mr. Gottdiener is a member of the Council on Foreign Relations and sits on the Board of Trustees of the National Outdoor Leadership School (NOLS). He is a member of the Black Rock Forest Consortium Leadership Council and on the Board of Directors of AZTherapies. He is a former member of the board of trustees of The Brearley School and the Princeton School of Public and International Affairs.
Brandon Ralph is the Founder and Chief Executive Officer of The Unquantifiable, a marketing services consultancy. He has over 20 years of experience navigating consumer content distribution and consumption behavior as a creative leader in omni-channel content-concentric marketing strategies. Mr. Ralph is a Founder and, for seventeen years, was the Chief Creative Officer of Code and Theory, an independent digital first creative agency. At Code and Theory, Mr. Ralph led the creative teams for over 70 fashion, lifestyle, media, and entertainment brands for publishers, including Vice, NBC Olympics, The Huffington Post, Bloomberg, and The Verge. He has also been a trusted creative collaborator for Anna Wintour, Arianna Huffington, Tina Brown, David Carey and Tomas Maier. His unique ability to learn customer behaviors and amplify brands has afforded him the opportunity to deliver award-winning strategies across a broad spectrum of industries. Mr. Ralph’s clients have included Bottega Venetta, Hermes, Burger King and Dr Pepper Snapple Group. Mr. Ralph has also served as the Chief Experience Officer and Chief Creative officer of Equinox Fitness Holdings and as the Chief Creative Officer of NJOY.
Carlos Rohm has been Chief Executive Officer of LCA Capital, a family office with ties to Mexico, since 2007. Previously, Mr. Rohm was a Principal of JPMorgan Partners. Mr. Rohm has been a director of and is a member of the Operating Committee of Grupo Aeroportuario del Pacifico. He is also a director of FIBRA Storage and Liv Capital Acquisition Corp., a special purpose acquisition company.
Ronald Stern is a highly experienced marketing and operations executive who has also been actively involved in evaluating and pursuing investment opportunities with Meadow Lane. Mr. Stern was the President and a long-time executive of SlimFast prior to its sale for $2 billion to Unilever PLC and subsequently served as a Consultant to Unilever. Mr. Stern is an active angel investor in emerging companies and advises a number of consumer-facing and health oriented businesses.
Jonathan H. Weis has over 30 years of corporate leadership experience. He has been the Chairman, President and Chief Executive Officer of Weis Markets, a leading regional supermarket chain with over 23,000 employees and 197 stores, since 2014 and has served in executive capacities with Weis Markets since 1989. Under the leadership of Mr. Weis, Weis Markets has expanded its operations significantly both organically and via acquisition and has maintained its market position in a highly competitive environment. Mr. Weis has also been responsible for establishing and implementing major strategic initiatives that reflect Weis Markets’ focus on understanding continuously evolving consumer perspectives, optimizing organizational issues with respect to human capital and operational capabilities and controlling, increasing and maximizing the considerable intellectual property associated with Weis Markets.
Our advisory board members (i) assist us in sourcing potential business combination targets, (ii) provide their business insights when we assess potential business combination targets and (iii) upon our request, provide their business insights as we work to create additional value in the businesses that we acquire. In this regard, they fulfill some of the same functions as our board members. However, our advisory board members do not perform board or committee functions, nor do they have any voting or decision making capacity on our behalf. They are also not subject to the fiduciary requirements to which our board members are subject. We may modify or expand our roster of advisory board members as we source potential business combination targets or create value in businesses that we may pursue or acquire.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent within one year of our Initial Public Offering. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We have three “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our board has determined that each of James E. Lieber, Mary C. Tanner and Laura A. Weil is an independent director under applicable SEC rules and the Nasdaq listing standards.
Our independent directors have regularly scheduled meetings at which only independent directors are present.
Number, Terms of Office and Election of Officers and Director
Our board of directors consists of five members. Prior to our initial Business Combination, holders of our Founder Shares will have the right to appoint all of our directors and remove members of our board of directors for any reason, and holders of our Public Shares will not have the right to vote on the appointment of directors during such time. These provisions of our Charter may only be amended by a special resolution passed by the holders of a majority of at least 90% of our ordinary shares attending and voting in a general meeting. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the shareholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by a majority of the holders of our ordinary shares (or, prior to our initial Business Combination, holders of our Founder Shares).
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our Charter as it deems appropriate. Our Charter provides that our officers may consist of a Chairman, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Committees of the Board of Directors
We have established three standing committees - an audit committee, a compensation committee and a nominating and corporate governance committee, each composed of independent directors. Each committee operates under a charter that was approved by our board of directors and has the composition and responsibilities described below. The charter of each committee is available on our website.
Audit Committee
The members of our audit committee are Mary C. Tanner, James E. Lieber and Laura A. Weil. Mary C. Tanner serves as chair of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that each of Mary C. Tanner, James E. Lieber and Laura A. Weil qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:
● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm;
● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;
● pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
● reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;
● setting clear hiring policies for employees or former employees of the independent registered public accounting firm;
● setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
The members of our compensation committee are Laura A. Weil, James E. Lieber and Mary C. Tanner. Laura A. Weil serves as chair of the compensation committee. We have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:
● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
● reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;
● reviewing our executive compensation policies and plans;
● implementing and administering our incentive compensation equity-based remuneration plans;
● assisting management in complying with our proxy statement and annual report disclosure requirements;
● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
● producing a report on executive compensation to be included in our annual proxy statement; and
● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominating and Corporate Governance Committee
The members of our nominating and corporate governance committee are James E. Lieber, Mary C. Tanner, and Laura A. Weil. James E. Lieber will serve as chair of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including:
● identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board of directors, and recommending to the board of directors candidates for nomination for election at the annual stockholder meeting or to fill vacancies on the board of directors;
● developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
● coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the Company; and
● reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and is directly responsible for approving the search firm’s fees and other retention terms.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders. Prior to our initial Business Combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to our board of directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to us, or written representations that no Forms 5 were required, we believe that, during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers and directors were complied with.
Code of Ethics
We have adopted a code of ethics and business conduct (our “Code of Ethics”) applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Annual Report. We have also posted a copy of our Code of Ethics and the charters of our audit committee, compensation committee and nominating and corporate governance committee on our website (PearlHAC.com) under “Corporate Governance”. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Annual Report. You are able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
● duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
● duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
● duty to not improperly fetter the exercise of future discretion;
● duty to exercise powers fairly as between different sections of shareholders;
● duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
● duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge, skill and experience which that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the Charter or alternatively by shareholder approval at general meetings.
Our team, in their capacities as directors, officers or employees of our Sponsor or its affiliates or in their other endeavors, may choose to present potential Business Combinations to the related entities described above, current or future entities affiliated with or managed by our Sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties.
Certain members of our team have fiduciary duties to Meadow Lane and to certain companies in which Meadow Lane has invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. None of the members of our team who are also employed by our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential Business Combination of which they become aware, subject to his or her fiduciary duties under Cayman Islands law. Our officers, directors and members of our Advisory Board have agreed not to participate in the formation of, or become an officer, director or strategic advisor of, any other special purpose acquisition company with a class of securities registered under the Exchange Act without our prior written consent, which will not be unreasonably withheld.
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a Business Combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such Business Combination opportunity to such entity, or in the case of a non-compete restriction, may not present such opportunity to us at all, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for any director or officer, on the one hand, and us, on the other. Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. See “Item 1.A. Risk Factors -Certain of our directors, officers and advisory board members are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
In addition, our Sponsor, its members, our officers or our directors or their respective affiliates may be investors, or have other direct or indirect interests, in a business with which we may enter into a Business Combination agreement and/or in certain funds or other persons that own Public Shares or that may otherwise purchase our Class A ordinary shares in the public market.
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company. Such advisors’ roles with respect to our Company is expected to be primarily passive and advisory in nature. Our advisory board members may have fiduciary and/or contractual duties to certain companies but do not have any fiduciary obligations to our Company. As a result, our advisory board members may have a duty to offer Business Combination opportunities to certain other companies before our Company. Additionally, certain companies affiliated with our advisory board members may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial Business Combination. Transactions of these types may present a conflict of interest because our advisory board members may directly or indirectly receive a financial benefit as a result of such transaction. See “Item 1.A. Risk Factors -Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company.”
Potential investors should also be aware of the following potential conflicts of interest:
● Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
● In the course of their other business activities, our directors and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
● Pursuant to a letter agreement entered into with us, our initial shareholders, directors and officers have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the consummation of our initial Business Combination. Additionally, our initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares if we fail to consummate our initial Business Combination by December 17, 2024. However, if our initial shareholders (or any of our directors, officers or affiliates) acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to consummate our initial Business Combination within the prescribed time frame. If we do not complete our initial Business Combination within such applicable time period, the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of our Public Shares, and the Private Placement Warrants will expire worthless. With certain limited exceptions, pursuant to such letter agreement, our initial shareholders, directors and officers have agreed not to transfer, assign or sell their Founder Shares until the earlier of: (1) one year after the completion of our initial Business Combination; and (2) subsequent to our initial Business Combination (x) if the last reported sale price of our Class A
ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial Business Combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the Private Placement Warrants and the ordinary shares underlying such warrants, will not be transferable, assignable or salable by our Sponsor until 30 days after the completion of our initial Business Combination. Since our Sponsor and our team may directly or indirectly own ordinary shares and warrants, our directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial Business Combination.
● Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination. These agreements may provide for them to receive compensation following our initial Business Combination and, as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular Business Combination.
● Our directors and officers may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial Business Combination.
The conflicts described above may not be resolved in our favor.
Accordingly, as a result of multiple business affiliations, our directors and officers have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our directors and officers currently have fiduciary duties or contractual obligations:13
Individual
Entity
Entity’s Business
Affiliation
Craig E. Barnett
Meadow Lane Capital
Investments
Chief Executive Officer
Barnett & Partners Advisors, LLC
Advisory services
Chief Executive Officer
Terry Duddy
Majid Al Futtaim Properties LLC
Property Management
Non-Executive Director
Catch 22 Charity Ltd
Charity
Non-Executive Chair
London Marathon Events Ltd
Charity
Non-Executive Chair
Martin F. Lewis
Meadow Lane Capital
Investments
Managing Principal
MM Dillon & Co.
Advisory services
Managing Director
Scott M. Napolitano
Scott Michael Partners LLC
Advisory services
Managing Member
James E. Lieber
Lieber Strategies
Consulting
Founder and President
LVMH Moet Hennessy Louis Vuitton Inc.
Consumer goods
Director
DFS Group
Consumer goods
Director
Gabriel Resources Ltd.
Mining
Director
Stanhope Capital Group
Wealth management
Director
Mary C. Tanner
EVOLUTION Life Sciences Partners
Advisory services
Co-Founder and Senior Managing Director
Laura A. Weil
Carnival Corporation
Global Fashion Group, SA
Tourism
Consumer goods
Director
Director
Village Lane Advisory LLC
Consulting
Founder and Managing Partner
Note to Pearl: Please confirm if any updates.
Accordingly, if any of the above directors or officers become aware of a Business Combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such entity, and only present it to us if such entity rejects the opportunity, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
We are not prohibited from pursuing an initial Business Combination with a company that is affiliated with our Sponsor, directors or officers. In the event we seek to complete our initial Business Combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such an initial Business Combination is fair to our Company from a financial point of view. Unless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our Company from a financial point of view.
In addition, our Sponsor or any of its affiliates may make additional investments in the Company in connection with the initial Business Combination, although our Sponsor and its affiliates have no obligation or current intention to do so. If our Sponsor or any of its affiliates elects to make additional investments, such proposed investments could influence our Sponsor’s motivation to complete an initial Business Combination.
In the event that we submit our initial Business Combination to our Public Shareholders for a vote, our initial shareholders, directors and officers have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any Founder Shares (and their permitted transferees will agree) and Public Shares held by them in favor of our initial Business Combination.
Item 11. Executive Compensation.
None of our directors or officers have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial Business Combination and our liquidation, we will pay our Sponsor a total of $15,000 per month for office space, administrative and support services. Our Sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, directors, officers or our or any of their affiliates.
After the completion of our initial Business Combination, directors or members of our team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial Business Combination will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial Business Combination should be a determining factor in our decision to proceed with any potential Business Combination.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information available to us at April 16, 2024 with respect to our ordinary shares held by:
● each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
● each of our executive officers and directors; and
● all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Warrants as these are not exercisable within 60 days of April 16, 2024.
Class A
Ordinary Shares
Class B
Ordinary Shares(1)
Beneficially
Owned
Approximate
Percentage
of Class
Beneficially
Owned
Approximate
Percentage
of Class
Approximate
Percentage of
Outstanding
Ordinary
Shares
Name and Address of Beneficial Owner(2)
Pearl Holdings Sponsor LLC (our Sponsor)(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Craig E. Barnett(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Terry Duddy
-
-
-
-
Martin F. Lewis
-
-
-
-
Scott M. Napolitano
-
-
-
-
James E. Lieber
-
-
-
-
Mary C. Tanner
-
-
-
-
Laura A. Weil
-
-
-
-
All directors and officers as a group (7 individuals)
3,000,000
58.1
%
2,000,000
100.0 %
69.8
%
Polar Asset Management Partners Inc.(4)
250,000
4.8
%
3.5
%
Mangrove Partners IM, LLC(5)
249,158
4.8
%
3.5 %
SZOP Multistrat LP(6)
297,903
5.8 %
4.2
%
Sandia Investment Management L.P.(7)
125,000
2.4 %
1.7 %
* Less than one percent.
(1) Class B ordinary shares will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-261319).
(2) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Pearl Holdings Acquisition Corp, 767 Third Avenue, 11th Floor, New York, New York 10017.
(3) Pearl Holdings Sponsor LLC, our Sponsor, is the record holder of the 5,000,000 Founder Shares reported herein. The manager of our Sponsor is Craig E. Barnett. By virtue of his control over our Sponsor, Craig E. Barnett may be deemed to beneficially own shares held by our Sponsor.
(4)
According to a Schedule 13G filed on January 10, 2024, Polar Asset Management Partners Inc. has sole voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting person is 16 York Street, Suite 2900, Toronto, ON, Canada M5J 0E6.
(5) According to a Schedule 13G filed on January 10, 2024, Mangrove Partners IM, LLC and Nathaniel August have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the principal business office of Mangrove Partners IM, LLC is c/o Delaware Corporations LLC, 1000 N. West Street, Suite 1501, Wilmington, DE 19801. The address of the principal business office of Nathaniel August is 2 Sound View Drive, 3rd Floor, Greenwich, Connecticut 06830.
(6) According to a Schedule 13G filed on January 22, 2024, SZOP Multistrat LP, SZOP Multistrat Management LLC, Antonio Ruiz-Gimenez and Kerry Propper have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting persons is 17 State Street, Suite 2130, New York, NY 10004.
(7) According to a Schedule 13G filed on February 14, 2024, Sandia Investment Management L.P. and Timothy J. Sichler held 125,000 Class A ordinary shares. The address of the principal business office of each of Sandia Investment Management L.P. and Timothy J. Sichler is 201 Washington Street, Boston, MA 02108.
Our initial shareholders beneficially own approximately 69.8% of the issued and outstanding ordinary shares and have the right to elect all of our directors prior to our initial Business Combination as a result of holding all of the Founder Shares. Holders of our Public Shares will not have the right to appoint any directors to our board of directors prior to our initial Business Combination. In addition, because of their ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our Charter and approval of significant corporate transactions.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Founder Shares
On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. On December 22, 2021, 2022, due to the partial exercise of the over-allotment option by the underwriter of the Initial Public Offering, the Sponsor forfeited 31,250 Class B Ordinary Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
Private Placement Warrants
Simultaneously with the closing of our Initial Public Offering our Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. Simultaneously with the closing of the over-allotment, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, for an aggregate of $1,000,000.
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If we do not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of our Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
Letter Agreement
Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of our initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public Shares if we have not consummated an initial Business Combination by December 17, 2024 or with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity and (C) to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if we fail to complete an initial Business Combination by December 17, 2024, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if we fail to complete an initial Business Combination within such time period, and (iii) the Founder Shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of an initial Business Combination on a one-for-one basis, subject to adjustment as described in our amended and restated certificate of incorporation. If we submit an initial Business Combination to our Public Shareholders for a vote, our initial shareholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of the initial Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. We will bear the expenses incurred in connection with the filing of any such registration statements.
Related Party Notes
On April 1, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. These loans are non-interest bearing, unsecured and were due at the earlier of December 31, 2021 or the closing of the Initial Public Offering. The outstanding loan of $244,648 was repaid upon the closing of the Initial Public Offering out of the offering proceeds not held in the Trust Account. As of December 31, 2021, the Company had no outstanding borrowings under the promissory note.
Administrative Services Agreement
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $15,000 per month for office space, utilities, administrative and support services.
Item 14. Principal Accounting Fees and Services.
BDO USA, P.C. (“BDO”), an independent registered public accounting firm, has served as our auditor since 2021.
The following is a summary of fees paid or to be paid to BDO for services rendered.
For the
Year ended
December 31,
For the
Year ended
December 31,
Audit Fees(1)
$ 113,112
$ 75,825
Audit-Related Fees(2)
$ -
$ -
Tax Fees(3)
$ -
$ -
All Other Fees(4)
$ -
$ -
Total
$ 113,112
$ 75,825
(1) Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.
(2) Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.
(3) Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.
(4) All Other Fees. All other fees consist of fees billed for all other services including permitted due diligence services related potential Business Combination.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
Part IV.
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Form 10-K:
(1) Financial Statements:
Page
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements Of Class A Ordinary Shares Subject To Possible Redemption And Changes In Shareholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements to
(2) Financial Statement Schedules:
None.
(3) Exhibits
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
No.
Description of Exhibit
3.1(1)
Amended and Restated Memorandum and Articles of Association of the Company.
3.2(2)
Amendment to Amended and Restated Memorandum and Articles of Association of the Company.
4.2(3)
Description of the Company’s securities.
10.1(4)
Form of Non-Redemption Agreement.
10.2(2)
Amendment to Investment Management Trust Agreement, dated December 8, 2023, by and between the Company and Continental Stock Transfer & Trust Company, as trustee.
10.2(5)
Subscription Agreement, dated February 22, 2024, by and among Pearl Holdings Acquisition Corp, Pearl Holdings Sponsor LLC and Polar Multi-Strategy Master Fund.
14.1(3)
Code of Ethics and Business Conduct of Pearl Holdings Acquisition Corp
31.1*
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1*
Clawback Policy of the Company.
101.INS*
XBRL Instance Document.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
* Filed herewith.
** Furnished herewith.
(1) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 17, 2021.
(2) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 14, 2023.
(3) Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2022.
(4) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 11, 2023.
(5) Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 28, 2024.
Item 16. Form 10-K Summary.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PEARL HOLDINGS ACQUISITION CORP
Date: April 16, 2024 /s/ Craig E. Barnett
By: Craig E. Barnett
Chairman and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant on April 16, 2024 and in the capacities indicated.
/s/ Craig E. Barnett
Name: Craig E. Barnett
Title: Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ Martin F. Lewis
Name: Martin F. Lewis
Title: Managing Director and Chief Financial Officer
(Principal Financial Officer and Accounting Officer)
/s/ Terry Duddy
Name: Terry Duddy
Title: Vice Chairman and Director
/s/ Scott M. Napolitano
Name: Scott M. Napolitano
Title: Managing Director
/s/ James E. Lieber
Name: James E. Lieber
Title: Director
/s/ Mary C. Tanner
Name: Mary C. Tanner
Title: Director
/s/ Laura A. Weil
Name: Laura A. Weil
Title: Director
PEARL HOLDINGS ACQUISITION CORP
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; New York, New York; PCAOB #243):
Financial Statements:
Balance Sheets
Statements of Operations
Statements Of Class A Ordinary Shares Subject To Possible Redemption And Changes In Shareholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements to
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Pearl Holdings Acquisition Corp
Grand Cayman, Cayman Islands
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Pearl Holdings Acquisition Corp (the “Company”) as of December 31, 2023, and 2022, the related statements of operations, statements of class A ordinary shares subject to possible redemption and changes in shareholders' deficit, and statement of cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company does not have sufficient cash and working capital to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ BDO USA, P.C
We have served as the Company’s auditor since 2021.
New York, New York
April 16, 2024
PEARL HOLDINGS ACQUISITION CORP
BALANCE SHEETS
December 31,
Assets
Cash
$ 30,793
$ 410,799
Prepaid expenses
-
168,343
Total current assets
30,793
579,142
Investment held in Trust Account
23,644,203
206,887,145
Total assets
$ 23,674,996
$ 207,466,287
Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
Accrued expenses
$ 778,672
$ 188,409
Due to related party
143,709
38,709
Total current liabilities
922,381
227,118
Deferred underwriters’ discount
7,000,000
7,000,000
Total liabilities
7,922,381
7,227,118
Commitments & Contingencies (See Note 6)
Class A ordinary shares subject to possible redemption, 2,167,693 and 20,000,000 shares at redemption value at December 31, 2023 and 2022, respectively
23,644,203
206,887,145
Shareholders’ Deficit:
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at December 31, 2023 and 2022
-
-
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 2,167,693 and 20,000,000 shares subject to possible redemption) at December 31, 2023 and 2022, respectively
-
-
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,000,000 shares issued and outstanding at December 31, 2023 and 2022
Additional paid-in capital
-
-
Accumulated deficit
(7,892,088 )
(6,648,476 )
Total Shareholders’ Deficit
(7,891,588 )
(6,647,976 )
Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
$ 23,674,996
$ 207,466,287
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF OPERATIONS
For the
Year Ended
December 31,
Operating costs
$ 1,243,612
$ 846,695
Loss from operations
(1,243,612 )
(846,695 )
Other income
Earnings on investments held in Trust Account
9,889,565
2,887,145
Total other income
9,889,565
2,887,145
Net income
$ 8,645,953
$ 2,040,450
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption
19,364,877
20,000,000
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
$ 0.46
$ 0.11
Weighted average shares outstanding, Non-redeemable Class B ordinary shares
5,000,000
5,000,000
Basic and diluted net income per share, Non-redeemable Class B ordinary shares
$ (0.05 )
$ (0.03 )
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND
CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
Class A
Ordinary shares subject
to possible redemption
Class B
Ordinary shares
Additional
Paid-In
Accumulated
Shareholders’
Shares
Amount
Shares
Amount
Capital
Deficit
Deficit
Balance as of December 31, 2021
20,000,000
$ 204,000,000
5,000,000
$
$ -
$ (5,801,781 )
$ (5,801,281 )
Accretion of Class A Common stock to redemption value
-
2,887,145
-
-
-
(2,887,145 )
(2,887,145 )
Net income
-
-
-
-
-
2,040,450
2,040,450
Balance as of December 31, 2022
20,000,000
206,887,145
5,000,000
-
(6,648,476 )
(6,647,976 )
Accretion of Class A Common stock to redemption value
-
9,889,565
-
-
(9,889,565 )
(9,889,565 )
Redemption of Class A Common stock subject to redemption
(17,832,307 )
(193,132,507 )
-
-
-
-
-
Net income
-
-
-
-
-
8,645,953
8,645,953
Balance as of December 31, 2023
2,167,693
$ 23,644,203
5,000,000
$
$ -
$ (7,892,088 )
$ (7,891,588 )
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF CASH FLOWS
For the
Year Ended
December 31,
Cash flows from operating activities:
Net income
$ 8,645,953
$ 2,040,450
Adjustments to reconcile net income to net cash provided by operating activities:
Interest earned on investment held in Trust Account
-
-
Changes in current assets and liabilities:
Prepaid expenses
168,343
(83,071 )
Accrued expenses
590,263
(58,482 )
Due to related party
105,000
-
Net cash provided by operating activities
9,509,559
1,898,897
Cash flows from investing activities:
Reinvestment of interest into marketable securities
(9,889,565 )
(2,887,145 )
Cash withdrawn from Trust Account in connection with redemption
193,132,507
-
Net cash provided by (used in) investing activities
183,242,942
(2,887,145 )
Cash flows from financing activities:
Advances from related party
-
180,000
Repayment of advances from related party
-
(150,000 )
Redemption of Class A Common stock subject to redemption
(193,132,507 )
-
Net cash provided by (used in) financing activities
(193,132,507 )
30,000
Net change in cash
(380,006 )
(958,248 )
Cash, beginning of the period
410,799
1,369,047
Cash, end of the period
$ 30,793
$ 410,799
Supplemental disclosure of cash flow information:
Non-cash financing transaction:
Accretion of Class A ordinary shares to redemption value
$ 9,889,565
$ 2,887,145
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Organization, Business Operations and Liquidity
Pearl Holdings Acquisition Corp (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 23, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). While the Company may pursue an initial Business Combination target in any industry or geographic location, the Company intends to focus its search for a target business operating in the lifestyle, health and wellness and technology sectors.
As of December 31, 2023, the Company had not commenced any operations. All activity for the period from March 23, 2021 (inception) through December 31, 2023 relates to the Company’s formation and the initial Public Offering (as defined below) and since the offering, identifying and evaluating prospective acquisition targets for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments held in Trust Account, from the proceeds derived from the Public Offering (as defined below).
The Company’s Sponsor is Pearl Holdings Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor”).
The registration statement for the Company’s the IPO was declared effective on December 14, 2021 (the “Effective Date”). On December 17, 2021, we consummated our Initial Public Offering of 17,500,000 units at $10.00 per unit (the “Units” and, with respect to the Class A ordinary shares included in the Units offered, the “Public Shares,” or the “Class A ordinary shares”), and the sale of 9,000,000 Private Placement Warrants (the “Private Placement Warrants”) to our Sponsor, at a price of $1.00 per Private Placement Warrant in a private placement (the “Private Placement”) that closed simultaneously with our Initial Public Offering. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. On December 20, 2021 the underwriter partially exercised its over-allotment option and stated its intention to purchase an additional 2,500,000 of the 2,625,000 over-allotment Units available. The over-allotment closed on December 22, 2021. Simultaneously with the closing of the over-allotment, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, generating gross proceeds to the Company of $1,000,000.
Transaction costs related to the Public Offering amounted to $11,712,588 consisting of $4,000,000 of underwriting commissions, $7,000,000 of deferred underwriting commissions, and $712,588 of other offering costs.
Following the closing of the Initial Public Offering and the over-allotment, $204,000,000 ($10.20 per Unit) from the net proceeds of the sale of the Units and the Private Placement Warrants was deposited into a Trust Account (the “Trust Account”) and has been invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. We will not be permitted to withdraw any of the principal or interest held in the Trust Account except for the withdrawal of interest to pay taxes, if any.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
The funds held in the Trust Account will not otherwise be released from the Trust Account until the earliest of: (1) the completion of the initial Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend its amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company do not complete its initial Business Combination within 24 months from the closing of the Public Offering, or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity; and (3) the redemption of the public shares if the Company has not completed an initial Business Combination within 24 months from the closing of the Public Offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.
The Company will provide the public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either: (1) in connection with a general meeting called to approve the Business Combination or (2) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement. The shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of its initial Business Combination, including interest (net of taxes payable), divided by the number of then issued and outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account immediately following the closing of the Initial Public Offering was $10.20 per Public Share. The per-share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company may pay to the underwriters.
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity pursuant to the completion of the Public Offering and immediately accreted to redemption value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company initially had until June 17, 2023 (18 months after the closing of its Public Offering) to complete a Business Combination, unless the Sponsor elected to exercise its extension options which would provide for up to 24 months from the closing of the Public Offering to complete a Business Combination (the “Combination Period”). In June 2023 and September 2023, pursuant to its amended and restated memorandum and articles of association, the Company was afforded automatic three-month extensions of the Combination Period, as a result of entering into a non-binding letter of intent with respect to a potential initial Business Combination, pursuant to which the Combination Period was extended until December 17, 2023.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
On June 14, 2023, the Company received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with Listing Rule 5452(b)(C), due to our failure to maintain the minimum of $1,000,000 in aggregate market value of our outstanding warrants. The notice is a notification of deficiency, not of imminent delisting. The Company submitted a plan of compliance to achieve and sustain compliance with all Nasdaq Global Market listing requirements. Management cannot assure that the Company will be able to maintain compliance with the Nasdaq continued listing requirements, including the minimum market value of the outstanding warrants, or that the warrants will continue to be listed on Nasdaq.
On December 8, 2023, the Company held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), at which the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million. The Company also voted and passed proposals to extend the Combination Period during the Extraordinary General Meeting in which the Company must consummate a business combination from December 17, 2023 to December 17, 2024, and to amend the Charter and the Company’s investment management trust agreement to allow the Company to extend the date by which it must complete its initial Business Combination from December 17, 2023 to December 17, 2024.
The initial shareholders, directors and officers have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of the initial Business Combination or certain amendments to the amended and restated memorandum and articles of association as described elsewhere in this prospectus. In addition, the initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the prescribed time frame. However, if the initial shareholders acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete its initial Business Combination within the prescribed time frame.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than its independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.20 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the Trust Assets, in each case net of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.
The Company and the Sponsor entered into non-redemption agreements (the “Non-Redemption Agreements”) with certain existing shareholders (the “Shareholders”), pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on December 8, 2023, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 1,875,000 of their Class A Ordinary Shares (the “Non-Redeemed Shares”). Pursuant to the Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 420,000 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such Non-Redeemed Shares through the Extraordinary General Meeting.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
In connection with the vote which occurred at the Extraordinary General Meeting on December 8, 2023, the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million in connection with the proposals set forth below. After the satisfaction of such redemptions, the balance in the Company’s trust account was approximately $23.4 million.
Going Concern
As of December 31, 2023, the Company had $30,793 in operating cash and working capital deficit of $891,588. The Company’s liquidity needs up to December 31, 2023, had been satisfied through a payment from the Sponsor of $25,000 for Class B ordinary shares, par value $0.0001 per (see Note 5), the Public Offering and the issuance of the Private Warrants. Additionally, the Company drew on an unsecured promissory note to pay certain offering costs (see Note 5) which was repaid from the proceeds of the Public Offering.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed (defined in Note 5 below).
The Company is less than one year from its mandatory liquidation as of the time of filing this Annual Report on Form 10-K. Management has determined that the liquidity condition due to cash and insufficient working capital, described above, and mandatory liquidation raises substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date the financial statements are issued.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Risks and Uncertainties
Management continues to evaluate the impact of ongoing geopolitical instability events, including the Russia-Ukraine conflict and the Israel-Hamas conflict, and has concluded that while it is reasonably possible that the war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The credit and financial markets have experienced extreme volatility and disruptions due to ongoing geopolitical instability events and other economic factors. Such volatility is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of these financial statements is in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $30,793 and $410,799 in cash as of December 31, 2023 and 2022, respectively. The Company did not have any cash equivalents as of December 31, 2023 and 2022.
Investments Held in Trust Account
At December 31, 2023 and 2022, the assets held in the Trust Account were held in money market mutual funds which invest in U.S. Treasury securities. During the year ended December 31, 2023 and 2022, the Company did not withdraw any of the interest income from the Trust Account to pay any tax obligations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. As of December 31, 2023 and 2022, the Company has not experienced losses on these accounts.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Offering Costs Associated with IPO
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are charged against the carrying value of Class A shares and the Public Warrants based on the relative value of those instruments. Accordingly, on December 17, 2021, offering costs totaling $11,712,588 (consisting of $4,000,000 of underwriting commissions, $7,000,000 of deferred underwriting commissions and $712,588 of actual offering costs) were recognized, of which $392,590 was allocated to the Public Warrants and charged against additional paid-in capital and $11,319,998 were allocated to Class A shares reducing the initial carrying amount of such shares.
Net Income/(Loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC 260, Earnings Per Share. The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average ordinary shares outstanding for the respective period. Diluted net income per share attributable to ordinary shareholders adjust the basic net income per share attributable to ordinary shareholders and the weighted-average ordinary shares outstanding for the potentially dilutive impact of outstanding warrants. However, because the warrants are anti-dilutive, diluted income per ordinary share is the same as basic income per ordinary share for the periods presented.
With respect to the accretion of Class A ordinary shares subject to possible redemption and consistent with ASC Topic 480-10-S99-3A, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net income per ordinary share.
The following table reflects the calculation of basic and diluted net income/(loss) per ordinary share:
Schedule of earning per share
For the
Year Ended
December 31,
Net income
$ 8,645,953
$ 2,040,450
Less: Accretion of temporary equity to redemption value
(9,889,565 )
(2,887,145 )
Net loss including accretion of temporary equity to redemption value
$ (1,243,612 )
$ (846,695 )
For the Year Ended
December 31,
Class A
Class B
Class A
Class B
Basic and diluted net income (loss) per share:
Numerator:
Allocation of net (loss) including accretion of temporary equity
$ (988,406 )
$ (255,206 )
$ (677,356 )
$ (169,339 )
Deemed dividend for accretion of temporary equity to redemption value
9,889,565
-
2,887,145
-
Allocation of net income (loss)
$ 8,901,159
$ (255,206 )
$ 2,209,789
$ (169,339 )
Denominator:
Weighted-average shares outstanding
19,364,877
5,000,000
20,000,000
5,000,000
Basic and diluted income (loss) per share
$ 0.46
$ (0.05 )
$ 0.11
$ (0.03 )
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Fair Value of Financial Instruments
FASB ASC 820, “Fair value Measurement,” defines fair value as the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants.
Fair value measurements are classified on a three-tier hierarchy as follows:
● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The fair value of the Company’s assets and liabilities, which qualify as financial instruments approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature.
Derivative Financial Instruments
The Company accounts for derivative financial instruments as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of issuance and as of each subsequent quarterly period end date while the instruments are outstanding. Management concluded that the Public Warrants and Private Placement Warrants issued pursuant to the warrant agreement qualify for equity accounting treatment.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2023 and 2022, 2,167,693 and 20,000,000 Class A ordinary shares, par value $0.0001 per share subject to possible redemption are presented, at redemption value, as temporary equity outside of the shareholders’ deficit section of the Company’s balance sheets.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit. During the year ended December 31, 2023, the Company recorded an accretion of $9,889,565 in accumulated deficit for the increase in the redemption value of the redeemable ordinary shares. In connection with the vote which occurred at the Extraordinary General Meeting, the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million. After the satisfaction of such redemptions, the balance in the Company’s trust account will be approximately $23.4 million. During the year ended December 31, 2022, the Company recorded an accretion of $2,887,145 in accumulated deficit for the increase in the redemption value of the redeemable ordinary shares.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2023 and 2022, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 - Public Offering
On December 17, 2021, the Company consummated its Public Offering of 17,500,000 Units and on December 22, 2021 additional 2,500,000 Units were placed as a result of exercise of the overallotment option by the underwriters. Each Unit had a price of $10.00 and consists of one Class A ordinary share, and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). Each warrant will become exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 4 - Private Placement
Simultaneously with the closing of the IPO Company’s Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. In connection with exercise of the overallotment option by the underwriters on December 22, 2021 an additional 1,000,000 Private Placement Warrants were purchased by the Sponsor.
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Public Offering and deposited in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
The Sponsor, officers and directors of the Company have entered into a letter agreement with the Company, pursuant to which they have agreed (A) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of the Company’s initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company has not consummated an initial Business Combination within 18 months (or up to 24 months if our sponsor exercises its extension options) from the closing of the Public Offering or with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity and (C) to waive their rights to liquidating distributions from the trust account with respect to any Founder Shares they hold if the Company fails to complete an initial Business Combination within 18 months (or up to 24 months if our sponsor exercises its extension options) from the closing of the Public Offering or during any Extension Period, although they will be entitled to liquidating distributions from the trust account with respect to any Public Shares they hold if the Company fails to complete an initial Business Combination within such time period, and (iii) the Founder Shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of an initial Business Combination on a one-for-one basis, subject to adjustment as described in the Company’s amended and restated certificate of incorporation. If the Company submits an initial Business Combination to the Company’s public shareholders for a vote, the Company’s initial shareholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Public Offering in favor of the initial Business Combination.
Note 5 - Related Party Transactions
Founder Shares
On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. Following the completion of the overallotment, the Sponsor surrendered on December 22, 2021 an additional 31,350 Founder Shares, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Working Capital Loans
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the as Loans may be repaid only out of funds held outside the trust account. Up to $2,000,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor. The terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and 2022, the Company had no borrowings under the Working Capital Loans.
Administrative Service Fee
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $15,000 per month for office space, utilities, administrative and support services. For the year ended December 31, 2023, administrative service fees incurred by the Company were $180,000. For the year ended December 31, 2022 administrative service fee incurred by the Company is $180,000. As of December 31, 2023 and 2022, the amount due to sponsor for these administrative services fees are $143,709 and $38,709 as reflected in Due to Related Party in the accompanying balance sheets, respectively.
Note 6 - Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Shareholders - Transfers of Founder Shares and Private Placement Warrants.” The Company will bear the expenses incurred in connection with the filing of any such.
Underwriting Agreement
The underwriters had a 45-day option from the date of the Public Offering to purchase up to an additional 2,625,000 Units to cover over-allotments, if any. This option was partially exercised on December 22, 2021, and the remaining over-allotment option expired on March 31, 2022.
The underwriters earned a cash underwriting discount of two percent (2%) of the gross proceeds of the Public Offering, or $4,000,000 in connection with consummation of the Public Offering and the partial exercise of the over-allotment option on December 22, 2021.
Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Public Offering, or $7,000,000 held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Vendor Agreements
As of December 31, 2023, the Company has incurred legal fees of 1,117,163. Of this amount, only $496,189 is contingent upon the consummation of an initial Business Combination.
Non-Redemption Agreements
The Company and the Sponsor entered into the Non-Redemption Agreements with certain Shareholders, pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on December 8, 2023, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to the Non-Redeemed Shares. Pursuant to the Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 420,000 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such Non-Redeemed Shares through the Extraordinary General Meeting.
The Company accounts for the Non-Redemption Agreements in accordance with the guidance in ASC 718 ("Stock Compensation"). The Non-Redemption Agreement is representative of a share-based payment transaction in which the Company is acquiring services to be used within the Company's operations. The fair value of the 420,000 Class A Ordinary Shares granted to the Company’s non-redeeming shareholders is $1,132,941 or $2.67-$2.71 per share. The Class A Ordinary Shares were granted subject to a performance condition (i.e., the occurrence of the Business Combination). Compensation expense related to the issuance of shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of issued shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the to be issued shares.
Note 7 - Recurring Fair Value Measurements
As of December 31, 2023 and 2022, the Company’s marketable securities held in the Trust Account were valued at $23,644,203 and $206,887,145, respectively. The marketable securities held in the Trust Account must be recorded on the balance sheets at fair value and are subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
The following table presents fair value information as of December 31, 2023 and 2022, of the Company’s financial assets that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The Company’s marketable securities held in the Trust Account are based on interest income and market fluctuations in the value of invested marketable securities, which are considered observable. The fair value of the marketable securities held in trust are classified within Level 1 of the fair value hierarchy.
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy:
Schedule Of Fair Value Hierarchy For Assets and Liabilities Measured At Fair Value on a Recurring basis
December 31, 2023
Level 1
Level 2
Level 3
Assets
Investment held in Trust Account
$ 23,644,203
$ -
$ -
December 31, 2022
Level 1
Level 2
Level 3
Assets
Investment held in Trust Account
$ 206,887,145
$ -
$ -
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 8 - Shareholders’ Deficit
Preference Shares - The Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each. As of December 31, 2023 and 2022, there were no preference shares issued or outstanding.
Class A Ordinary Shares - The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001 each. As of December 31, 2023 and 2022, there were no Class A ordinary shares issued or outstanding, excluding 2,167,693 and 20,000,000 Class A ordinary shares subject to possible redemption, respectively.
Class B Ordinary Shares - The Company is authorized to issue a total of 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of December 31, 2023 and 2022, the Company had issued 5,000,000 Class B ordinary shares to its initial shareholders for $25,000, or approximately $0.005 per share. On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering and formation costs in exchange for an aggregate of 7,187,500 Founder Shares. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, and in December 2021 a further 31,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Public Offering and related to the closing of the initial Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding upon the completion of the Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for the Class A ordinary shares issued in a financing transaction in connection with the initial Business Combination, including, but not limited to, a private placement of equity or debt.
Public Warrants - Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
In addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the completion of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummate its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Once the warrants become exercisable, the Company may redeem the warrants (except as described herein with respect to the private placement warrants):
● in whole and not in part;
● at a price of $0.01 per warrant;
● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
● if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “- Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The “fair market value” of the Class A ordinary shares shall mean the volume weighted average price of the Class A ordinary shares as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the warrant redemption features used in some other blank check offerings. The Company will provide its warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants may be exercised for cash or on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. The Private Placement Warrants shall not become Public Warrants as a result of any transfer of the Private Placement Warrants, regardless of the transferee.
If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A ordinary shares and upon completion of such offer, the offeror owns beneficially securities representing more than 50% of the aggregate voting power represented by the issued and outstanding equity securities of the Company, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant had been exercised, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to the offer. If less than 70% of the consideration receivable by the holders of the Class A ordinary shares in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value (as defined in the warrant agreement).
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 9 - Subsequent Events
On January 5, 2024 upon receipt of a notice of conversion from the Sponsor pursuant to Article 17.2 of the Company’s amended and restated articles of association, the Company converted 3,000,000 of its Class B ordinary shares to Class A ordinary shares on a one-for-one basis. The Sponsor waived any right to receive funds from the Trust Account with respect to the Class A ordinary shares received upon such conversion and no additional amounts were deposited into the Trust Account in respect of any of those Class A ordinary shares. It is stipulated that the newly converted Class A ordinary shares shall be subject to the same lock-up provisions as the original Class B ordinary shares.
On February 22, 2024, The Company entered into a subscription agreement (the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (“Polar”), pursuant to which, and on the terms and subject to the conditions of which, Polar agreed to contribute up to $500,000 in cash to the Company (the “Capital Contribution”) to cover working capital expenses. In consideration of the Capital Contribution, the Company agreed to issue, or to cause the surviving entity of an initial business combination to issue, one Class A ordinary share (“Common Stock”) for each dollar of the Capital Contribution funded by Polar and received by the Company at or prior to an initial business combination closing (such funded amount, the “Capital Investment”), such Common Stock to be issued no later than two business days following an initial business combination closing (a “De-SPAC Closing”). The Capital Investment is required to be repaid by the Company to Polar upon a De-SPAC Closing, and Polar may elect to receive that repayment either (i) in cash or (ii) in Common Stock at a rate of one share of Common Stock for each $10.00 of Capital Investment. The Company and Sponsor are jointly and severally obligated for such repayment of the Capital Investment upon a De-SPAC Closing. In the event that the Company liquidates without consummating an initial business combination, any amounts remaining in Sponsor’s or the Company’s cash accounts, not including the Company’s trust account, would be applied to the repayment of the Capital Investment, in full satisfaction of any amounts due under the Subscription Agreement.
On February 22, 2024, the Company entered into additional subscription agreements (the “Additional Subscription Agreements”) with five other parties for additional Capital Contributions in the aggregate of $282,000. The terms of the Additional Subscription Agreements are identical to the Subscription Agreement entered into with Polar above.
On March 26, 2024, the Company amended the Investment Management Trust Agreement (the “Trust Agreement”), where, Section 1(c) of the trust agreement was amended and restated in its entirety. As per the amendment, at the written request of the Company, all amounts held in trust are to be deposited in an interest-bearing bank demand deposit account with a maturity of 185 days or less, or in money market funds governed by the Investment Company Act of 1940. On March 26, 2024, the Company transferred substantially all of the assets held in the Trust Account to a demand deposit account held by the Trustee.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
This information appears following Item 16 of this Report and is included herein by reference.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
Item 9.A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to material weaknesses in our internal controls over financial reporting.
Management’s Report on Internal Controls Over Financial Reporting
As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting at December 31, 2023. In making these assessments, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our assessments and those criteria, management determined that we did not maintain effective internal control over financial reporting as of December 31, 2023. During the audit of the financial statements for the year ended December 31, 2022, a material weakness was identified related to the fact that we have not designed or maintained controls over the financial reporting close process which resulted in an error in the classification of investing activities in the statement of cash flows. During the audit of the financial statements for the year ended December 31, 2023, a material weakness was identified in our internal control over financial reporting related to the fact that we have not designed or maintained controls over the accounting for complex financial instruments, specifically the Non-Redemption Agreements. These material weaknesses continue to exist as of December 31, 2023. Management performed additional procedures as deemed necessary to ensure the financial statements were prepared in accordance with U.S. GAAP for the year end December 31, 2023.
We have implemented remediation steps pertaining to the material weakness for the year ended December 31, 2022, including review of the third-party professional who we consult with in the preparation of our financial statements, as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted accounting principles. Accordingly, management believes that the financial statements included in this Form 10-K are presented fairly in all material respects.
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm due to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control, other than the material weakness discussed above, over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9.B. Other Information.
During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K.11
Item 9.C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection.
Not Applicable.
Note to Company: Please confirm.
Part III.
Item 10. Directors, Executive Officers and Corporate Governance.12
Our current directors and executive officer are as follows:
Name
Age
Title
Craig E. Barnett
Chief Executive Officer and Chairman
Terry Duddy
Vice Chairman and Director
Martin F. Lewis
Managing Director and Chief Financial Officer
Scott M. Napolitano
Managing Director
James E. Lieber
Director
Mary C. Tanner
Director
Laura A. Weil
Director
Craig E. Barnett has been our Chairman and Chief Executive Officer since May 2021. Mr. Barnett has been the Chief Executive Officer of Meadow Lane since 2014 and its associated broker-dealer and predecessor entities since inception and established and manages the global investment team. Mr. Barnett has over 35 years of experience in investment banking, private equity and corporate development and is responsible for Meadow Lane’s partnerships with financing and investment firms. Mr. Barnett has advised clients, pursued investments and overseen corporate development and finance activities with aggregate values exceeding $60 billion primarily in the consumer sectors of the global economy in the United States, Europe and Asia. In addition, Mr. Barnett has been highly active in corporate development, financing and acquisitions for GUS, Experian, Burberry, Argos, Arcade and Shaklee. Previously, Mr. Barnett was a senior executive in private equity and investment banking. He was a Managing Director with Blackstone, a Managing Director with The Bear Stearns Companies, Inc. and a Managing Director with PJ Solomon. Earlier in his career, Mr. Barnett was a Vice President at Lehman Brothers, in London, Tokyo and New York. Mr. Barnett, a graduate of the Wharton School, is active in a number of charitable and community organizations. Mr. Barnett was selected to serve on our board of directors due to his over 35 years of experience in corporate development, financing transactions and mergers and acquisitions.
Terry Duddy has been our Vice Chairman and a member of our board of directors since May 2021. Mr. Duddy has over 30 years of leadership experience with public companies and is a seasoned Chief Executive and digital commerce pioneer. Mr. Duddy has also worked with Meadow Lane principals for over 20 years. Mr. Duddy was a Director and member of the Executive Committee of GUS from 1998 to 2006, having joined as the Chief Executive Officer of Argos. Mr. Duddy was also responsible for the pan-European home shopping division of GUS that, though loss making, was eventually divested for over £800 million. Mr. Duddy was furthermore a member of the GUS board of directors’ Demerger Committee that presided over the demerger process of GUS that included the successful initial public offerings of Burberry, Experian and Home Retail Group. As Chief Executive Officer of Argos and its successor independent entity, Home Retail Group, from 1998 to 2014, Mr. Duddy guided the business through both the extensive digital transformation of the industry as well as the downturn of 2009. Argos was the UK’s first multichannel retailer with its e-commerce site and home delivery service launching in 1999 with over 20,000 product lines and a considerable private label brand. Mr. Duddy managed a $2 billion supply chain sourced from China, incubated emerging products, created new marketing technologies including the now ubiquitous and innovative “Click & Collect” sale and mentored a new generation of managers now in industry leadership positions. Most recently, Mr. Duddy was first Senior Independent Director and then Interim Board Chairman of Debenhams plc, which he managed through administration, secured financing for a successful reorganization and recruited a new Board. Mr. Duddy has been a member of True Capital Management’s advisory board since 2014, is the Chairman of London Marathon Events Ltd and is or has been a non-executive director of a number of other companies including Hammerson plc and Majid Al Futtaim Properties LLC. Mr. Duddy was selected to serve on our board of directors due to his lengthy and comprehensive experience in public company governance as both a director and an executive officer.
Note to Pearl: Have there been any updates to the director bios below? Have any of the directors worked on additional subsequent SPACs? We will need to add the updates in the conflicts of interest disclosure.
Martin F. Lewis has been our Chief Financial Officer and one of our Managing Directors since May 2021. Mr. Lewis has over 35 years of leadership experience in investment banking. He is the founder and Managing Principal, since 2014, of Gower Advisers, a financial advisory boutique in New York. He has also served as a Managing Principal of Meadow Lane since 2014. Previously, Mr. Lewis was a Managing Director with Greenhill, a founding member of Miller, Buckfire Lewis & Co (now Miller Buckfire), a Managing Director of Wasserstein Perella and a Managing Director of Blackstone. Mr. Lewis was also associated with Chemical Bank in London and New York and with NM Rothschild in London and Mexico. Mr. Lewis qualified as a Chartered Accountant in the UK and graduated with an M.A. from Oxford University.
Scott M. Napolitano has been one of our Managing Directors since May 2021. Mr. Napolitano has over 20 years of experience in investment banking acting as strategic and capital advisor to companies and private equity firms, principally in the healthcare and consumer sectors, evaluating mergers, acquisitions and strategic and financing alternatives. Mr. Napolitano is Managing Member of Scott Michael Partners LLC, an advisory and investment firm he founded in 2020 with a focus on healthcare and technology. Prior to founding Scott Michael Partners LLC, Mr. Napolitano served as Managing Director with Nomura Securities International from 2014 to 2020 where he was Head of MedTech Investment Banking and Healthcare M&A. Previously, he was a Managing Principal with Meadow Lane. Mr. Napolitano has also held senior investment banking positions with PJ Solomon, where he served as Managing Director and with The Goldman Sachs Group, Inc. and J.P. Morgan Chase & Co., where he served as Vice President. Mr. Napolitano is a graduate of Columbia University.
James E. Lieber has served as one of our directors since December 2021. Mr. Lieber has more than 25 years of experience in the strategic management of complex international projects and situations for multi-national corporations, investment funds, organizations and high net-worth individuals in Europe and the United States. Mr. Lieber is Founder and President of Lieber Strategies, a consultancy based in Paris. Prior to founding Lieber Strategies in 2004, Mr. Lieber served from 1997 to 2004 as Director of Corporate Affairs at LVMH, working with its chairman, Bernard Arnault, and his executive committee on major strategic projects. Mr. Lieber directed LVMH’s strategy in several multi-billion-dollar transactions and business conflicts and managed LVMH’s interests in international trade disputes and European competition clearance situations and other government relations matters. Before joining LVMH, Mr. Lieber practiced law with Cleary, Gottlieb, Steen & Hamilton LLP, where he worked in New York on international securities offerings, privatizations and real estate transactions, and in Paris representing clients in cross-border acquisitions and joint ventures in the media, luxury goods and pharmaceuticals sectors. Mr. Lieber is a director of numerous companies, including LVMH Moet Hennessy Louis Vuitton Inc., DFS Group and Gabriel Resources Ltd. He was formerly a director of Stanhope Capital Group, a private wealth manager and of Cheyne Capital Holdings, a hedge fund group. He is also a director of not for profit organizations including the French-American Foundation and Literacy Inc. and is a member of Panthera’s Conservation Council and a Friend of the Foundation for Jewish Heritage. Mr. Lieber is an attorney admitted to practice in the State of New York and a member of the Council on Foreign Relations and the Global Advisory Council of the Woodrow Wilson Center for International Scholars. Mr. Lieber holds a Juris Doctor degree cum laude from Northwestern University School of Law in Chicago, Illinois, where he was a member of the Order of the Coif, and a Master in Public Policy from Harvard University’s Kennedy School of Government, in Cambridge, Massachusetts. He received his Bachelor of Arts from Wesleyan University in Middletown, Connecticut, with honors in art history. Mr. Lieber was selected to serve on our board of directors due to his extensive experience as a strategic advisor to multinational businesses and his experience as a board member of public and private companies.
Mary C. Tanner has served as one of our directors since December 2021. Ms. Tanner has more than 30 years of leadership experience in investment banking and has served as a director on numerous private and public companies. Ms. Tanner is Senior Managing Director of ELSP, of which she is a co-founder. Ms. Tanner specializes in healthcare investment and strategic advisory work, including mergers and acquisitions, licensing, corporate minority strategic investments and fund raising. Ms. Tanner is also an active venture capital investor. Before founding ELSP with her husband and long standing business partner, Frederick Frank, Ms. Tanner held leadership positions for over 20 years in investment banking at Lehman Brothers, Bear Stearns and PJ Solomon. Ms. Tanner has directed over 500 mergers and acquisitions, over 130 initial public offerings and hundreds of financings and is highly experienced in mergers involving spinoffs of public companies. Ms. Tanner has significant expertise in life sciences, traditional pharmaceutical industries and consumer healthcare. Advisory clients of Ms. Tanner have included Pfizer Inc., Block Drug, Amgen Inc., Rhône-Poulenc S.A., Marion Merrell Dow, Inc., BASF SE, Sanofi S.A., Revlon, Inc., Fabergé and L’Oréal S.A. Ms. Tanner was a 10-year member of the board of directors of Lineagen, Inc., a molecular diagnostic company, which was merged with Bionano Genomics, Inc. in 2021, and she
was Chair of its Audit and Compliance Committee. As a member of the board of directors of Genticel, S.A., an immune oncology company in France, she assisted in merging the company with Genkyotex, a Swiss/French publicly listed company, in a cross border transaction with Calliditas Therapeutics AB, a Swedish, Nasdaq-listed company. Previously, for a decade, she served on the board of directors of Evotec SE, a German company which is one of the largest companies in early stage contract research organization research. Ms. Tanner previously served on the board of directors of the consumer products company Block Drug prior to its sale to GlaxoSmithKline plc.
Ms. Tanner received a B.A. magna cum laude from Harvard University. She serves on the Advisory Board of the Yale School of Management and recently stepped down as an advisor to the Blavatnik Fund for Innovation at Yale and the Yale Center for Biomedical Innovation and Technology. Ms. Tanner was selected to serve on our board of directors due to her extensive experience directing mergers and acquisitions and serving on public company boards of directors.
Laura A. Weil has served as one of our directors since December 2021. Ms. Weil has over 25 years of corporate leadership experience. Ms. Weil has been an independent director of Carnival Corporation since 2007. She is the chair of the audit committee and a member of the compliance and compensation committees. She is also an independent director of Global Fashion Group, SA since 2019 and the chair of its audit committee. She previously served as a Director of Christopher & Banks Corporation. Ms. Weil is the Founder and has been the Managing Partner of Village Lane Advisory LLC, which specializes in providing executive and strategic consulting services to retailers as well as private equity firms, since 2015. Previously, Ms. Weil was the Executive Vice President and Chief Operating Officer of New York & Company, Inc., the Chief Executive Officer of Ashley Stewart LLC, the Chief Executive Officer of Urban Brands, Inc., the Chief Operating Officer of AnnTaylor Stores Corporation, the Chief Financial Officer of American Eagle Outfitters, Inc., and the Vice President Finance and CFO Credit Operations for Macy’s Inc. Ms. Weil was also a senior executive with investment banking firms including Oppenheimer and Lehman Brothers. Ms. Weil received a B.A. in Art History and Government from Smith College and an MBA from Columbia University Business School. Ms. Weil was selected to serve on our board of directors due to her extensive financial expertise and substantial experience in public company governance as a director and an executive officer.
Advisory Board
In addition to our team described above, the following individuals serve on our advisory board:
Victor J. Barnett has considerable experience as a successful investor in and leader of multiple global businesses. Mr. Barnett was a Director and member of the Executive Committee directing the affairs of GUS for over 20 years. Mr. Barnett also served as the Executive Chairman of Burberry and was the chief visionary for its operational reorganization and transformation. Mr. Barnett also led the global expansion, via $2.7 billion of acquisitions, of Experian. Mr. Barnett was previously a Director of Revlon and of various other private companies.
David C. Blatte has over 30 years of investment banking and private equity investing experience in the consumer and retail industry sectors. He is also a seasoned operating executive in the pet industry. He is the Chairman of Worldwise, Inc., one of the five largest pet accessory companies in the U.S., and was the Founder and CEO of Quaker Pet Group, one of Worldwise’s operating businesses. Mr. Blatte is a former Partner at Centre Partners, a former Partner at Catterton Partners, and a former Managing Director at Donaldson Lufkin & Jenrette Securities Corp. He holds a B.S. from the Wharton School of Business of the University of Pennsylvania.
Noah Gottdiener has 35 years of corporate leadership and investment banking experience. Mr. Gottdiener is the Executive Chairman of Kroll, formerly Duff & Phelps Corp., and chairs Kroll’s board of directors. He served as Chief Executive Officer and Chairman of the Board from 2004 to 2020. During that time, revenue increased from $30 million in 2004 to over $1 billion. Kroll has nearly 5,000 professionals in 30 countries and territories around the world. Mr. Gottdiener guided Kroll through a series of acquisitions, an initial public offering and a subsequent going private transaction. In April 2020, Mr. Gottdiener led Kroll through a $4.2 billion acquisition by a global investor consortium. Previously, Mr. Gottdiener was a Partner with Thomas Weisel Partners and Furman Selz LLC, and a Managing Director at Lehman Brothers Holdings Inc., where he began his career. Mr. Gottdiener is a member of the Council on Foreign Relations and sits on the Board of Trustees of the National Outdoor Leadership School (NOLS). He is a member of the Black Rock Forest Consortium Leadership Council and on the Board of Directors of AZTherapies. He is a former member of the board of trustees of The Brearley School and the Princeton School of Public and International Affairs.
Brandon Ralph is the Founder and Chief Executive Officer of The Unquantifiable, a marketing services consultancy. He has over 20 years of experience navigating consumer content distribution and consumption behavior as a creative leader in omni-channel content-concentric marketing strategies. Mr. Ralph is a Founder and, for seventeen years, was the Chief Creative Officer of Code and Theory, an independent digital first creative agency. At Code and Theory, Mr. Ralph led the creative teams for over 70 fashion, lifestyle, media, and entertainment brands for publishers, including Vice, NBC Olympics, The Huffington Post, Bloomberg, and The Verge. He has also been a trusted creative collaborator for Anna Wintour, Arianna Huffington, Tina Brown, David Carey and Tomas Maier. His unique ability to learn customer behaviors and amplify brands has afforded him the opportunity to deliver award-winning strategies across a broad spectrum of industries. Mr. Ralph’s clients have included Bottega Venetta, Hermes, Burger King and Dr Pepper Snapple Group. Mr. Ralph has also served as the Chief Experience Officer and Chief Creative officer of Equinox Fitness Holdings and as the Chief Creative Officer of NJOY.
Carlos Rohm has been Chief Executive Officer of LCA Capital, a family office with ties to Mexico, since 2007. Previously, Mr. Rohm was a Principal of JPMorgan Partners. Mr. Rohm has been a director of and is a member of the Operating Committee of Grupo Aeroportuario del Pacifico. He is also a director of FIBRA Storage and Liv Capital Acquisition Corp., a special purpose acquisition company.
Ronald Stern is a highly experienced marketing and operations executive who has also been actively involved in evaluating and pursuing investment opportunities with Meadow Lane. Mr. Stern was the President and a long-time executive of SlimFast prior to its sale for $2 billion to Unilever PLC and subsequently served as a Consultant to Unilever. Mr. Stern is an active angel investor in emerging companies and advises a number of consumer-facing and health oriented businesses.
Jonathan H. Weis has over 30 years of corporate leadership experience. He has been the Chairman, President and Chief Executive Officer of Weis Markets, a leading regional supermarket chain with over 23,000 employees and 197 stores, since 2014 and has served in executive capacities with Weis Markets since 1989. Under the leadership of Mr. Weis, Weis Markets has expanded its operations significantly both organically and via acquisition and has maintained its market position in a highly competitive environment. Mr. Weis has also been responsible for establishing and implementing major strategic initiatives that reflect Weis Markets’ focus on understanding continuously evolving consumer perspectives, optimizing organizational issues with respect to human capital and operational capabilities and controlling, increasing and maximizing the considerable intellectual property associated with Weis Markets.
Our advisory board members (i) assist us in sourcing potential business combination targets, (ii) provide their business insights when we assess potential business combination targets and (iii) upon our request, provide their business insights as we work to create additional value in the businesses that we acquire. In this regard, they fulfill some of the same functions as our board members. However, our advisory board members do not perform board or committee functions, nor do they have any voting or decision making capacity on our behalf. They are also not subject to the fiduciary requirements to which our board members are subject. We may modify or expand our roster of advisory board members as we source potential business combination targets or create value in businesses that we may pursue or acquire.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent within one year of our Initial Public Offering. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We have three “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our board has determined that each of James E. Lieber, Mary C. Tanner and Laura A. Weil is an independent director under applicable SEC rules and the Nasdaq listing standards.
Our independent directors have regularly scheduled meetings at which only independent directors are present.
Number, Terms of Office and Election of Officers and Director
Our board of directors consists of five members. Prior to our initial Business Combination, holders of our Founder Shares will have the right to appoint all of our directors and remove members of our board of directors for any reason, and holders of our Public Shares will not have the right to vote on the appointment of directors during such time. These provisions of our Charter may only be amended by a special resolution passed by the holders of a majority of at least 90% of our ordinary shares attending and voting in a general meeting. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the shareholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by a majority of the holders of our ordinary shares (or, prior to our initial Business Combination, holders of our Founder Shares).
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our Charter as it deems appropriate. Our Charter provides that our officers may consist of a Chairman, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Committees of the Board of Directors
We have established three standing committees - an audit committee, a compensation committee and a nominating and corporate governance committee, each composed of independent directors. Each committee operates under a charter that was approved by our board of directors and has the composition and responsibilities described below. The charter of each committee is available on our website.
Audit Committee
The members of our audit committee are Mary C. Tanner, James E. Lieber and Laura A. Weil. Mary C. Tanner serves as chair of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that each of Mary C. Tanner, James E. Lieber and Laura A. Weil qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:
● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm;
● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;
● pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
● reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;
● setting clear hiring policies for employees or former employees of the independent registered public accounting firm;
● setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
The members of our compensation committee are Laura A. Weil, James E. Lieber and Mary C. Tanner. Laura A. Weil serves as chair of the compensation committee. We have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:
● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
● reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;
● reviewing our executive compensation policies and plans;
● implementing and administering our incentive compensation equity-based remuneration plans;
● assisting management in complying with our proxy statement and annual report disclosure requirements;
● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
● producing a report on executive compensation to be included in our annual proxy statement; and
● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominating and Corporate Governance Committee
The members of our nominating and corporate governance committee are James E. Lieber, Mary C. Tanner, and Laura A. Weil. James E. Lieber will serve as chair of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including:
● identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board of directors, and recommending to the board of directors candidates for nomination for election at the annual stockholder meeting or to fill vacancies on the board of directors;
● developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
● coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the Company; and
● reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and is directly responsible for approving the search firm’s fees and other retention terms.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders. Prior to our initial Business Combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to our board of directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to us, or written representations that no Forms 5 were required, we believe that, during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers and directors were complied with.
Code of Ethics
We have adopted a code of ethics and business conduct (our “Code of Ethics”) applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Annual Report. We have also posted a copy of our Code of Ethics and the charters of our audit committee, compensation committee and nominating and corporate governance committee on our website (PearlHAC.com) under “Corporate Governance”. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Annual Report. You are able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
● duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
● duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
● duty to not improperly fetter the exercise of future discretion;
● duty to exercise powers fairly as between different sections of shareholders;
● duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
● duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge, skill and experience which that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the Charter or alternatively by shareholder approval at general meetings.
Our team, in their capacities as directors, officers or employees of our Sponsor or its affiliates or in their other endeavors, may choose to present potential Business Combinations to the related entities described above, current or future entities affiliated with or managed by our Sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties.
Certain members of our team have fiduciary duties to Meadow Lane and to certain companies in which Meadow Lane has invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. None of the members of our team who are also employed by our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential Business Combination of which they become aware, subject to his or her fiduciary duties under Cayman Islands law. Our officers, directors and members of our Advisory Board have agreed not to participate in the formation of, or become an officer, director or strategic advisor of, any other special purpose acquisition company with a class of securities registered under the Exchange Act without our prior written consent, which will not be unreasonably withheld.
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a Business Combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such Business Combination opportunity to such entity, or in the case of a non-compete restriction, may not present such opportunity to us at all, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for any director or officer, on the one hand, and us, on the other. Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. See “Item 1.A. Risk Factors -Certain of our directors, officers and advisory board members are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
In addition, our Sponsor, its members, our officers or our directors or their respective affiliates may be investors, or have other direct or indirect interests, in a business with which we may enter into a Business Combination agreement and/or in certain funds or other persons that own Public Shares or that may otherwise purchase our Class A ordinary shares in the public market.
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company. Such advisors’ roles with respect to our Company is expected to be primarily passive and advisory in nature. Our advisory board members may have fiduciary and/or contractual duties to certain companies but do not have any fiduciary obligations to our Company. As a result, our advisory board members may have a duty to offer Business Combination opportunities to certain other companies before our Company. Additionally, certain companies affiliated with our advisory board members may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial Business Combination. Transactions of these types may present a conflict of interest because our advisory board members may directly or indirectly receive a financial benefit as a result of such transaction. See “Item 1.A. Risk Factors -Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company.”
Potential investors should also be aware of the following potential conflicts of interest:
● Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
● In the course of their other business activities, our directors and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
● Pursuant to a letter agreement entered into with us, our initial shareholders, directors and officers have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the consummation of our initial Business Combination. Additionally, our initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares if we fail to consummate our initial Business Combination by December 17, 2024. However, if our initial shareholders (or any of our directors, officers or affiliates) acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to consummate our initial Business Combination within the prescribed time frame. If we do not complete our initial Business Combination within such applicable time period, the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of our Public Shares, and the Private Placement Warrants will expire worthless. With certain limited exceptions, pursuant to such letter agreement, our initial shareholders, directors and officers have agreed not to transfer, assign or sell their Founder Shares until the earlier of: (1) one year after the completion of our initial Business Combination; and (2) subsequent to our initial Business Combination (x) if the last reported sale price of our Class A
ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial Business Combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the Private Placement Warrants and the ordinary shares underlying such warrants, will not be transferable, assignable or salable by our Sponsor until 30 days after the completion of our initial Business Combination. Since our Sponsor and our team may directly or indirectly own ordinary shares and warrants, our directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial Business Combination.
● Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination. These agreements may provide for them to receive compensation following our initial Business Combination and, as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular Business Combination.
● Our directors and officers may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial Business Combination.
The conflicts described above may not be resolved in our favor.
Accordingly, as a result of multiple business affiliations, our directors and officers have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our directors and officers currently have fiduciary duties or contractual obligations:13
Individual
Entity
Entity’s Business
Affiliation
Craig E. Barnett
Meadow Lane Capital
Investments
Chief Executive Officer
Barnett & Partners Advisors, LLC
Advisory services
Chief Executive Officer
Terry Duddy
Majid Al Futtaim Properties LLC
Property Management
Non-Executive Director
Catch 22 Charity Ltd
Charity
Non-Executive Chair
London Marathon Events Ltd
Charity
Non-Executive Chair
Martin F. Lewis
Meadow Lane Capital
Investments
Managing Principal
MM Dillon & Co.
Advisory services
Managing Director
Scott M. Napolitano
Scott Michael Partners LLC
Advisory services
Managing Member
James E. Lieber
Lieber Strategies
Consulting
Founder and President
LVMH Moet Hennessy Louis Vuitton Inc.
Consumer goods
Director
DFS Group
Consumer goods
Director
Gabriel Resources Ltd.
Mining
Director
Stanhope Capital Group
Wealth management
Director
Mary C. Tanner
EVOLUTION Life Sciences Partners
Advisory services
Co-Founder and Senior Managing Director
Laura A. Weil
Carnival Corporation
Global Fashion Group, SA
Tourism
Consumer goods
Director
Director
Village Lane Advisory LLC
Consulting
Founder and Managing Partner
Note to Pearl: Please confirm if any updates.
Accordingly, if any of the above directors or officers become aware of a Business Combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such entity, and only present it to us if such entity rejects the opportunity, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
We are not prohibited from pursuing an initial Business Combination with a company that is affiliated with our Sponsor, directors or officers. In the event we seek to complete our initial Business Combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such an initial Business Combination is fair to our Company from a financial point of view. Unless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our Company from a financial point of view.
In addition, our Sponsor or any of its affiliates may make additional investments in the Company in connection with the initial Business Combination, although our Sponsor and its affiliates have no obligation or current intention to do so. If our Sponsor or any of its affiliates elects to make additional investments, such proposed investments could influence our Sponsor’s motivation to complete an initial Business Combination.
In the event that we submit our initial Business Combination to our Public Shareholders for a vote, our initial shareholders, directors and officers have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any Founder Shares (and their permitted transferees will agree) and Public Shares held by them in favor of our initial Business Combination.
Item 11. Executive Compensation.
None of our directors or officers have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial Business Combination and our liquidation, we will pay our Sponsor a total of $15,000 per month for office space, administrative and support services. Our Sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, directors, officers or our or any of their affiliates.
After the completion of our initial Business Combination, directors or members of our team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial Business Combination will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial Business Combination should be a determining factor in our decision to proceed with any potential Business Combination.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information available to us at April 16, 2024 with respect to our ordinary shares held by:
● each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
● each of our executive officers and directors; and
● all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Warrants as these are not exercisable within 60 days of April 16, 2024.
Class A
Ordinary Shares
Class B
Ordinary Shares(1)
Beneficially
Owned
Approximate
Percentage
of Class
Beneficially
Owned
Approximate
Percentage
of Class
Approximate
Percentage of
Outstanding
Ordinary
Shares
Name and Address of Beneficial Owner(2)
Pearl Holdings Sponsor LLC (our Sponsor)(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Craig E. Barnett(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Terry Duddy
-
-
-
-
Martin F. Lewis
-
-
-
-
Scott M. Napolitano
-
-
-
-
James E. Lieber
-
-
-
-
Mary C. Tanner
-
-
-
-
Laura A. Weil
-
-
-
-
All directors and officers as a group (7 individuals)
3,000,000
58.1
%
2,000,000
100.0 %
69.8
%
Polar Asset Management Partners Inc.(4)
250,000
4.8
%
3.5
%
Mangrove Partners IM, LLC(5)
249,158
4.8
%
3.5 %
SZOP Multistrat LP(6)
297,903
5.8 %
4.2
%
Sandia Investment Management L.P.(7)
125,000
2.4 %
1.7 %
* Less than one percent.
(1) Class B ordinary shares will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-261319).
(2) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Pearl Holdings Acquisition Corp, 767 Third Avenue, 11th Floor, New York, New York 10017.
(3) Pearl Holdings Sponsor LLC, our Sponsor, is the record holder of the 5,000,000 Founder Shares reported herein. The manager of our Sponsor is Craig E. Barnett. By virtue of his control over our Sponsor, Craig E. Barnett may be deemed to beneficially own shares held by our Sponsor.
(4)
According to a Schedule 13G filed on January 10, 2024, Polar Asset Management Partners Inc. has sole voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting person is 16 York Street, Suite 2900, Toronto, ON, Canada M5J 0E6.
(5) According to a Schedule 13G filed on January 10, 2024, Mangrove Partners IM, LLC and Nathaniel August have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the principal business office of Mangrove Partners IM, LLC is c/o Delaware Corporations LLC, 1000 N. West Street, Suite 1501, Wilmington, DE 19801. The address of the principal business office of Nathaniel August is 2 Sound View Drive, 3rd Floor, Greenwich, Connecticut 06830.
(6) According to a Schedule 13G filed on January 22, 2024, SZOP Multistrat LP, SZOP Multistrat Management LLC, Antonio Ruiz-Gimenez and Kerry Propper have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting persons is 17 State Street, Suite 2130, New York, NY 10004.
(7) According to a Schedule 13G filed on February 14, 2024, Sandia Investment Management L.P. and Timothy J. Sichler held 125,000 Class A ordinary shares. The address of the principal business office of each of Sandia Investment Management L.P. and Timothy J. Sichler is 201 Washington Street, Boston, MA 02108.
Our initial shareholders beneficially own approximately 69.8% of the issued and outstanding ordinary shares and have the right to elect all of our directors prior to our initial Business Combination as a result of holding all of the Founder Shares. Holders of our Public Shares will not have the right to appoint any directors to our board of directors prior to our initial Business Combination. In addition, because of their ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our Charter and approval of significant corporate transactions.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Founder Shares
On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. On December 22, 2021, 2022, due to the partial exercise of the over-allotment option by the underwriter of the Initial Public Offering, the Sponsor forfeited 31,250 Class B Ordinary Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
Private Placement Warrants
Simultaneously with the closing of our Initial Public Offering our Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. Simultaneously with the closing of the over-allotment, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, for an aggregate of $1,000,000.
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If we do not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of our Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
Letter Agreement
Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of our initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public Shares if we have not consummated an initial Business Combination by December 17, 2024 or with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity and (C) to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if we fail to complete an initial Business Combination by December 17, 2024, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if we fail to complete an initial Business Combination within such time period, and (iii) the Founder Shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of an initial Business Combination on a one-for-one basis, subject to adjustment as described in our amended and restated certificate of incorporation. If we submit an initial Business Combination to our Public Shareholders for a vote, our initial shareholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of the initial Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. We will bear the expenses incurred in connection with the filing of any such registration statements.
Related Party Notes
On April 1, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. These loans are non-interest bearing, unsecured and were due at the earlier of December 31, 2021 or the closing of the Initial Public Offering. The outstanding loan of $244,648 was repaid upon the closing of the Initial Public Offering out of the offering proceeds not held in the Trust Account. As of December 31, 2021, the Company had no outstanding borrowings under the promissory note.
Administrative Services Agreement
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $15,000 per month for office space, utilities, administrative and support services.
Item 14. Principal Accounting Fees and Services.
BDO USA, P.C. (“BDO”), an independent registered public accounting firm, has served as our auditor since 2021.
The following is a summary of fees paid or to be paid to BDO for services rendered.
For the
Year ended
December 31,
For the
Year ended
December 31,
Audit Fees(1)
$ 113,112
$ 75,825
Audit-Related Fees(2)
$ -
$ -
Tax Fees(3)
$ -
$ -
All Other Fees(4)
$ -
$ -
Total
$ 113,112
$ 75,825
(1) Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.
(2) Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.
(3) Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.
(4) All Other Fees. All other fees consist of fees billed for all other services including permitted due diligence services related potential Business Combination.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
Part IV.
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Form 10-K:
(1) Financial Statements:
Page
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements Of Class A Ordinary Shares Subject To Possible Redemption And Changes In Shareholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements to
(2) Financial Statement Schedules:
None.
(3) Exhibits
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
No.
Description of Exhibit
3.1(1)
Amended and Restated Memorandum and Articles of Association of the Company.
3.2(2)
Amendment to Amended and Restated Memorandum and Articles of Association of the Company.
4.2(3)
Description of the Company’s securities.
10.1(4)
Form of Non-Redemption Agreement.
10.2(2)
Amendment to Investment Management Trust Agreement, dated December 8, 2023, by and between the Company and Continental Stock Transfer & Trust Company, as trustee.
10.2(5)
Subscription Agreement, dated February 22, 2024, by and among Pearl Holdings Acquisition Corp, Pearl Holdings Sponsor LLC and Polar Multi-Strategy Master Fund.
14.1(3)
Code of Ethics and Business Conduct of Pearl Holdings Acquisition Corp
31.1*
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1*
Clawback Policy of the Company.
101.INS*
XBRL Instance Document.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
* Filed herewith.
** Furnished herewith.
(1) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 17, 2021.
(2) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 14, 2023.
(3) Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2022.
(4) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 11, 2023.
(5) Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 28, 2024.
Item 16. Form 10-K Summary.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PEARL HOLDINGS ACQUISITION CORP
Date: April 16, 2024 /s/ Craig E. Barnett
By: Craig E. Barnett
Chairman and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant on April 16, 2024 and in the capacities indicated.
/s/ Craig E. Barnett
Name: Craig E. Barnett
Title: Chairman and Chief Executive Officer
(Principal Executive Officer)
/s/ Martin F. Lewis
Name: Martin F. Lewis
Title: Managing Director and Chief Financial Officer
(Principal Financial Officer and Accounting Officer)
/s/ Terry Duddy
Name: Terry Duddy
Title: Vice Chairman and Director
/s/ Scott M. Napolitano
Name: Scott M. Napolitano
Title: Managing Director
/s/ James E. Lieber
Name: James E. Lieber
Title: Director
/s/ Mary C. Tanner
Name: Mary C. Tanner
Title: Director
/s/ Laura A. Weil
Name: Laura A. Weil
Title: Director
PEARL HOLDINGS ACQUISITION CORP
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; New York, New York; PCAOB #243):
Financial Statements:
Balance Sheets
Statements of Operations
Statements Of Class A Ordinary Shares Subject To Possible Redemption And Changes In Shareholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements to
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Pearl Holdings Acquisition Corp
Grand Cayman, Cayman Islands
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Pearl Holdings Acquisition Corp (the “Company”) as of December 31, 2023, and 2022, the related statements of operations, statements of class A ordinary shares subject to possible redemption and changes in shareholders' deficit, and statement of cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company does not have sufficient cash and working capital to sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ BDO USA, P.C
We have served as the Company’s auditor since 2021.
New York, New York
April 16, 2024
PEARL HOLDINGS ACQUISITION CORP
BALANCE SHEETS
December 31,
Assets
Cash
$ 30,793
$ 410,799
Prepaid expenses
-
168,343
Total current assets
30,793
579,142
Investment held in Trust Account
23,644,203
206,887,145
Total assets
$ 23,674,996
$ 207,466,287
Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
Accrued expenses
$ 778,672
$ 188,409
Due to related party
143,709
38,709
Total current liabilities
922,381
227,118
Deferred underwriters’ discount
7,000,000
7,000,000
Total liabilities
7,922,381
7,227,118
Commitments & Contingencies (See Note 6)
Class A ordinary shares subject to possible redemption, 2,167,693 and 20,000,000 shares at redemption value at December 31, 2023 and 2022, respectively
23,644,203
206,887,145
Shareholders’ Deficit:
Preference shares, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding at December 31, 2023 and 2022
-
-
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized; none issued and outstanding (excluding 2,167,693 and 20,000,000 shares subject to possible redemption) at December 31, 2023 and 2022, respectively
-
-
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 5,000,000 shares issued and outstanding at December 31, 2023 and 2022
Additional paid-in capital
-
-
Accumulated deficit
(7,892,088 )
(6,648,476 )
Total Shareholders’ Deficit
(7,891,588 )
(6,647,976 )
Total Liabilities, Redeemable Ordinary Shares and Shareholders’ Deficit
$ 23,674,996
$ 207,466,287
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF OPERATIONS
For the
Year Ended
December 31,
Operating costs
$ 1,243,612
$ 846,695
Loss from operations
(1,243,612 )
(846,695 )
Other income
Earnings on investments held in Trust Account
9,889,565
2,887,145
Total other income
9,889,565
2,887,145
Net income
$ 8,645,953
$ 2,040,450
Weighted average shares outstanding, Class A ordinary shares subject to possible redemption
19,364,877
20,000,000
Basic and diluted net income per share, Class A ordinary shares subject to possible redemption
$ 0.46
$ 0.11
Weighted average shares outstanding, Non-redeemable Class B ordinary shares
5,000,000
5,000,000
Basic and diluted net income per share, Non-redeemable Class B ordinary shares
$ (0.05 )
$ (0.03 )
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND
CHANGES IN SHAREHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
Class A
Ordinary shares subject
to possible redemption
Class B
Ordinary shares
Additional
Paid-In
Accumulated
Shareholders’
Shares
Amount
Shares
Amount
Capital
Deficit
Deficit
Balance as of December 31, 2021
20,000,000
$ 204,000,000
5,000,000
$
$ -
$ (5,801,781 )
$ (5,801,281 )
Accretion of Class A Common stock to redemption value
-
2,887,145
-
-
-
(2,887,145 )
(2,887,145 )
Net income
-
-
-
-
-
2,040,450
2,040,450
Balance as of December 31, 2022
20,000,000
206,887,145
5,000,000
-
(6,648,476 )
(6,647,976 )
Accretion of Class A Common stock to redemption value
-
9,889,565
-
-
(9,889,565 )
(9,889,565 )
Redemption of Class A Common stock subject to redemption
(17,832,307 )
(193,132,507 )
-
-
-
-
-
Net income
-
-
-
-
-
8,645,953
8,645,953
Balance as of December 31, 2023
2,167,693
$ 23,644,203
5,000,000
$
$ -
$ (7,892,088 )
$ (7,891,588 )
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
STATEMENTS OF CASH FLOWS
For the
Year Ended
December 31,
Cash flows from operating activities:
Net income
$ 8,645,953
$ 2,040,450
Adjustments to reconcile net income to net cash provided by operating activities:
Interest earned on investment held in Trust Account
-
-
Changes in current assets and liabilities:
Prepaid expenses
168,343
(83,071 )
Accrued expenses
590,263
(58,482 )
Due to related party
105,000
-
Net cash provided by operating activities
9,509,559
1,898,897
Cash flows from investing activities:
Reinvestment of interest into marketable securities
(9,889,565 )
(2,887,145 )
Cash withdrawn from Trust Account in connection with redemption
193,132,507
-
Net cash provided by (used in) investing activities
183,242,942
(2,887,145 )
Cash flows from financing activities:
Advances from related party
-
180,000
Repayment of advances from related party
-
(150,000 )
Redemption of Class A Common stock subject to redemption
(193,132,507 )
-
Net cash provided by (used in) financing activities
(193,132,507 )
30,000
Net change in cash
(380,006 )
(958,248 )
Cash, beginning of the period
410,799
1,369,047
Cash, end of the period
$ 30,793
$ 410,799
Supplemental disclosure of cash flow information:
Non-cash financing transaction:
Accretion of Class A ordinary shares to redemption value
$ 9,889,565
$ 2,887,145
The accompanying notes are an integral part of these financial statements.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Organization, Business Operations and Liquidity
Pearl Holdings Acquisition Corp (the “Company”) is a blank check company incorporated as a Cayman Islands exempted company on March 23, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). While the Company may pursue an initial Business Combination target in any industry or geographic location, the Company intends to focus its search for a target business operating in the lifestyle, health and wellness and technology sectors.
As of December 31, 2023, the Company had not commenced any operations. All activity for the period from March 23, 2021 (inception) through December 31, 2023 relates to the Company’s formation and the initial Public Offering (as defined below) and since the offering, identifying and evaluating prospective acquisition targets for a Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on investments held in Trust Account, from the proceeds derived from the Public Offering (as defined below).
The Company’s Sponsor is Pearl Holdings Sponsor LLC, a Cayman Islands limited liability company (the “Sponsor”).
The registration statement for the Company’s the IPO was declared effective on December 14, 2021 (the “Effective Date”). On December 17, 2021, we consummated our Initial Public Offering of 17,500,000 units at $10.00 per unit (the “Units” and, with respect to the Class A ordinary shares included in the Units offered, the “Public Shares,” or the “Class A ordinary shares”), and the sale of 9,000,000 Private Placement Warrants (the “Private Placement Warrants”) to our Sponsor, at a price of $1.00 per Private Placement Warrant in a private placement (the “Private Placement”) that closed simultaneously with our Initial Public Offering. Each Unit consists of one Class A ordinary share and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share. On December 20, 2021 the underwriter partially exercised its over-allotment option and stated its intention to purchase an additional 2,500,000 of the 2,625,000 over-allotment Units available. The over-allotment closed on December 22, 2021. Simultaneously with the closing of the over-allotment, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, generating gross proceeds to the Company of $1,000,000.
Transaction costs related to the Public Offering amounted to $11,712,588 consisting of $4,000,000 of underwriting commissions, $7,000,000 of deferred underwriting commissions, and $712,588 of other offering costs.
Following the closing of the Initial Public Offering and the over-allotment, $204,000,000 ($10.20 per Unit) from the net proceeds of the sale of the Units and the Private Placement Warrants was deposited into a Trust Account (the “Trust Account”) and has been invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act. We will not be permitted to withdraw any of the principal or interest held in the Trust Account except for the withdrawal of interest to pay taxes, if any.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering and the Private Placement Warrants, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination (less deferred underwriting commissions).
The Company’s Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the net assets held in the Trust Account (as defined below) (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in trust) at the time of the signing a definitive agreement in connection with the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There is no assurance that the Company will be able to successfully effect a Business Combination.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
The funds held in the Trust Account will not otherwise be released from the Trust Account until the earliest of: (1) the completion of the initial Business Combination; (2) the redemption of any Public Shares properly submitted in connection with a shareholder vote to amend its amended and restated memorandum and articles of association (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company do not complete its initial Business Combination within 24 months from the closing of the Public Offering, or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity; and (3) the redemption of the public shares if the Company has not completed an initial Business Combination within 24 months from the closing of the Public Offering, subject to applicable law. The proceeds deposited in the trust account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the public shareholders.
The Company will provide the public shareholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of the initial Business Combination either: (1) in connection with a general meeting called to approve the Business Combination or (2) by means of a tender offer. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or conduct a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would require the Company to seek shareholder approval under applicable law or stock exchange listing requirement. The shareholders will be entitled to redeem their shares at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account calculated as of two business days prior to the consummation of its initial Business Combination, including interest (net of taxes payable), divided by the number of then issued and outstanding Public Shares, subject to the limitations described herein. The amount in the Trust Account immediately following the closing of the Initial Public Offering was $10.20 per Public Share. The per-share amount the Company will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions the Company may pay to the underwriters.
The ordinary shares subject to redemption were recorded at a redemption value and classified as temporary equity pursuant to the completion of the Public Offering and immediately accreted to redemption value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks shareholder approval, a majority of the issued and outstanding shares voted are voted in favor of the Business Combination.
The Company initially had until June 17, 2023 (18 months after the closing of its Public Offering) to complete a Business Combination, unless the Sponsor elected to exercise its extension options which would provide for up to 24 months from the closing of the Public Offering to complete a Business Combination (the “Combination Period”). In June 2023 and September 2023, pursuant to its amended and restated memorandum and articles of association, the Company was afforded automatic three-month extensions of the Combination Period, as a result of entering into a non-binding letter of intent with respect to a potential initial Business Combination, pursuant to which the Combination Period was extended until December 17, 2023.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
On June 14, 2023, the Company received a written notice from the Listing Qualifications Department of Nasdaq indicating that the Company is not in compliance with Listing Rule 5452(b)(C), due to our failure to maintain the minimum of $1,000,000 in aggregate market value of our outstanding warrants. The notice is a notification of deficiency, not of imminent delisting. The Company submitted a plan of compliance to achieve and sustain compliance with all Nasdaq Global Market listing requirements. Management cannot assure that the Company will be able to maintain compliance with the Nasdaq continued listing requirements, including the minimum market value of the outstanding warrants, or that the warrants will continue to be listed on Nasdaq.
On December 8, 2023, the Company held an extraordinary general meeting of shareholders (the “Extraordinary General Meeting”), at which the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million. The Company also voted and passed proposals to extend the Combination Period during the Extraordinary General Meeting in which the Company must consummate a business combination from December 17, 2023 to December 17, 2024, and to amend the Charter and the Company’s investment management trust agreement to allow the Company to extend the date by which it must complete its initial Business Combination from December 17, 2023 to December 17, 2024.
The initial shareholders, directors and officers have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the completion of the initial Business Combination or certain amendments to the amended and restated memorandum and articles of association as described elsewhere in this prospectus. In addition, the initial shareholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares if the Company fails to complete its initial Business Combination within the prescribed time frame. However, if the initial shareholders acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete its initial Business Combination within the prescribed time frame.
The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party (other than its independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.20 per Public Share or (2) such lesser amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the Trust Assets, in each case net of interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Public Offering against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the sponsor will not be responsible to the extent of any liability for such third-party claims. The Company has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company and, therefore, the Sponsor may not be able to satisfy those obligations. The Company has not asked the Sponsor to reserve for such obligations.
The Company and the Sponsor entered into non-redemption agreements (the “Non-Redemption Agreements”) with certain existing shareholders (the “Shareholders”), pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on December 8, 2023, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 1,875,000 of their Class A Ordinary Shares (the “Non-Redeemed Shares”). Pursuant to the Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 420,000 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such Non-Redeemed Shares through the Extraordinary General Meeting.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
In connection with the vote which occurred at the Extraordinary General Meeting on December 8, 2023, the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million in connection with the proposals set forth below. After the satisfaction of such redemptions, the balance in the Company’s trust account was approximately $23.4 million.
Going Concern
As of December 31, 2023, the Company had $30,793 in operating cash and working capital deficit of $891,588. The Company’s liquidity needs up to December 31, 2023, had been satisfied through a payment from the Sponsor of $25,000 for Class B ordinary shares, par value $0.0001 per (see Note 5), the Public Offering and the issuance of the Private Warrants. Additionally, the Company drew on an unsecured promissory note to pay certain offering costs (see Note 5) which was repaid from the proceeds of the Public Offering.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed (defined in Note 5 below).
The Company is less than one year from its mandatory liquidation as of the time of filing this Annual Report on Form 10-K. Management has determined that the liquidity condition due to cash and insufficient working capital, described above, and mandatory liquidation raises substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date the financial statements are issued.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Risks and Uncertainties
Management continues to evaluate the impact of ongoing geopolitical instability events, including the Russia-Ukraine conflict and the Israel-Hamas conflict, and has concluded that while it is reasonably possible that the war could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The credit and financial markets have experienced extreme volatility and disruptions due to ongoing geopolitical instability events and other economic factors. Such volatility is expected to have further global economic consequences, including but not limited to the possibility of severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in inflation rates and uncertainty about economic and political stability. In addition, the United States and other countries have imposed sanctions on Russia which increases the risk that Russia, as a retaliatory action, may launch cyberattacks against the United States, its government, infrastructure and businesses. Any of the foregoing consequences, including those we cannot yet predict, may cause our business, financial condition, results of operations and the price of our ordinary shares to be adversely affected.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 2 - Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the SEC.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of these financial statements is in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had $30,793 and $410,799 in cash as of December 31, 2023 and 2022, respectively. The Company did not have any cash equivalents as of December 31, 2023 and 2022.
Investments Held in Trust Account
At December 31, 2023 and 2022, the assets held in the Trust Account were held in money market mutual funds which invest in U.S. Treasury securities. During the year ended December 31, 2023 and 2022, the Company did not withdraw any of the interest income from the Trust Account to pay any tax obligations.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. As of December 31, 2023 and 2022, the Company has not experienced losses on these accounts.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Offering Costs Associated with IPO
The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are charged against the carrying value of Class A shares and the Public Warrants based on the relative value of those instruments. Accordingly, on December 17, 2021, offering costs totaling $11,712,588 (consisting of $4,000,000 of underwriting commissions, $7,000,000 of deferred underwriting commissions and $712,588 of actual offering costs) were recognized, of which $392,590 was allocated to the Public Warrants and charged against additional paid-in capital and $11,319,998 were allocated to Class A shares reducing the initial carrying amount of such shares.
Net Income/(Loss) Per Ordinary Share
The Company complies with accounting and disclosure requirements of ASC 260, Earnings Per Share. The Company has two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Net income per ordinary share is calculated by dividing the net income by the weighted average ordinary shares outstanding for the respective period. Diluted net income per share attributable to ordinary shareholders adjust the basic net income per share attributable to ordinary shareholders and the weighted-average ordinary shares outstanding for the potentially dilutive impact of outstanding warrants. However, because the warrants are anti-dilutive, diluted income per ordinary share is the same as basic income per ordinary share for the periods presented.
With respect to the accretion of Class A ordinary shares subject to possible redemption and consistent with ASC Topic 480-10-S99-3A, the Company treated accretion in the same manner as a dividend, paid to the shareholder in the calculation of the net income per ordinary share.
The following table reflects the calculation of basic and diluted net income/(loss) per ordinary share:
Schedule of earning per share
For the
Year Ended
December 31,
Net income
$ 8,645,953
$ 2,040,450
Less: Accretion of temporary equity to redemption value
(9,889,565 )
(2,887,145 )
Net loss including accretion of temporary equity to redemption value
$ (1,243,612 )
$ (846,695 )
For the Year Ended
December 31,
Class A
Class B
Class A
Class B
Basic and diluted net income (loss) per share:
Numerator:
Allocation of net (loss) including accretion of temporary equity
$ (988,406 )
$ (255,206 )
$ (677,356 )
$ (169,339 )
Deemed dividend for accretion of temporary equity to redemption value
9,889,565
-
2,887,145
-
Allocation of net income (loss)
$ 8,901,159
$ (255,206 )
$ 2,209,789
$ (169,339 )
Denominator:
Weighted-average shares outstanding
19,364,877
5,000,000
20,000,000
5,000,000
Basic and diluted income (loss) per share
$ 0.46
$ (0.05 )
$ 0.11
$ (0.03 )
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Fair Value of Financial Instruments
FASB ASC 820, “Fair value Measurement,” defines fair value as the amount that would be received to sell an asset or paid to transfer a liability, in an orderly transaction between market participants.
Fair value measurements are classified on a three-tier hierarchy as follows:
● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy described above. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.
The fair value of the Company’s assets and liabilities, which qualify as financial instruments approximates the carrying amounts represented in the balance sheets, primarily due to its short-term nature.
Derivative Financial Instruments
The Company accounts for derivative financial instruments as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own common shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, was conducted at the time of issuance and as of each subsequent quarterly period end date while the instruments are outstanding. Management concluded that the Public Warrants and Private Placement Warrants issued pursuant to the warrant agreement qualify for equity accounting treatment.
Ordinary Shares Subject to Possible Redemption
The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ deficit. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, at December 31, 2023 and 2022, 2,167,693 and 20,000,000 Class A ordinary shares, par value $0.0001 per share subject to possible redemption are presented, at redemption value, as temporary equity outside of the shareholders’ deficit section of the Company’s balance sheets.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable ordinary shares to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit. During the year ended December 31, 2023, the Company recorded an accretion of $9,889,565 in accumulated deficit for the increase in the redemption value of the redeemable ordinary shares. In connection with the vote which occurred at the Extraordinary General Meeting, the holders of 17,832,307 Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $10.83 per share, for an aggregate of approximately $193.1 million. After the satisfaction of such redemptions, the balance in the Company’s trust account will be approximately $23.4 million. During the year ended December 31, 2022, the Company recorded an accretion of $2,887,145 in accumulated deficit for the increase in the redemption value of the redeemable ordinary shares.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes” (“ASC 740”). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2023 and 2022, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented.
Recent Accounting Pronouncements
Management does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 - Public Offering
On December 17, 2021, the Company consummated its Public Offering of 17,500,000 Units and on December 22, 2021 additional 2,500,000 Units were placed as a result of exercise of the overallotment option by the underwriters. Each Unit had a price of $10.00 and consists of one Class A ordinary share, and one-half of one redeemable warrant. Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment (see Note 8). Each warrant will become exercisable 30 days after the completion of the initial Business Combination and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 4 - Private Placement
Simultaneously with the closing of the IPO Company’s Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. In connection with exercise of the overallotment option by the underwriters on December 22, 2021 an additional 1,000,000 Private Placement Warrants were purchased by the Sponsor.
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Public Offering and deposited in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
The Sponsor, officers and directors of the Company have entered into a letter agreement with the Company, pursuant to which they have agreed (A) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of the Company’s initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of the Company’s Public Shares if the Company has not consummated an initial Business Combination within 18 months (or up to 24 months if our sponsor exercises its extension options) from the closing of the Public Offering or with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity and (C) to waive their rights to liquidating distributions from the trust account with respect to any Founder Shares they hold if the Company fails to complete an initial Business Combination within 18 months (or up to 24 months if our sponsor exercises its extension options) from the closing of the Public Offering or during any Extension Period, although they will be entitled to liquidating distributions from the trust account with respect to any Public Shares they hold if the Company fails to complete an initial Business Combination within such time period, and (iii) the Founder Shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of an initial Business Combination on a one-for-one basis, subject to adjustment as described in the Company’s amended and restated certificate of incorporation. If the Company submits an initial Business Combination to the Company’s public shareholders for a vote, the Company’s initial shareholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Public Offering in favor of the initial Business Combination.
Note 5 - Related Party Transactions
Founder Shares
On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. Following the completion of the overallotment, the Sponsor surrendered on December 22, 2021 an additional 31,350 Founder Shares, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the public shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Working Capital Loans
In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, the Sponsor or an affiliate of the Sponsor or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). If the Company completes the initial Business Combination, the Company will repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the as Loans may be repaid only out of funds held outside the trust account. Up to $2,000,000 of such Working Capital Loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to the Sponsor. The terms of the Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of December 31, 2023 and 2022, the Company had no borrowings under the Working Capital Loans.
Administrative Service Fee
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $15,000 per month for office space, utilities, administrative and support services. For the year ended December 31, 2023, administrative service fees incurred by the Company were $180,000. For the year ended December 31, 2022 administrative service fee incurred by the Company is $180,000. As of December 31, 2023 and 2022, the amount due to sponsor for these administrative services fees are $143,709 and $38,709 as reflected in Due to Related Party in the accompanying balance sheets, respectively.
Note 6 - Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement to be signed prior to or on the effective date of the Public Offering requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s completion of the initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described under “Principal Shareholders - Transfers of Founder Shares and Private Placement Warrants.” The Company will bear the expenses incurred in connection with the filing of any such.
Underwriting Agreement
The underwriters had a 45-day option from the date of the Public Offering to purchase up to an additional 2,625,000 Units to cover over-allotments, if any. This option was partially exercised on December 22, 2021, and the remaining over-allotment option expired on March 31, 2022.
The underwriters earned a cash underwriting discount of two percent (2%) of the gross proceeds of the Public Offering, or $4,000,000 in connection with consummation of the Public Offering and the partial exercise of the over-allotment option on December 22, 2021.
Additionally, the underwriters will be entitled to a deferred underwriting discount of 3.5% of the gross proceeds of the Public Offering, or $7,000,000 held in the Trust Account upon the completion of the Company’s initial Business Combination subject to the terms of the underwriting agreement.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Vendor Agreements
As of December 31, 2023, the Company has incurred legal fees of 1,117,163. Of this amount, only $496,189 is contingent upon the consummation of an initial Business Combination.
Non-Redemption Agreements
The Company and the Sponsor entered into the Non-Redemption Agreements with certain Shareholders, pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on December 8, 2023, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to the Non-Redeemed Shares. Pursuant to the Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 420,000 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such Non-Redeemed Shares through the Extraordinary General Meeting.
The Company accounts for the Non-Redemption Agreements in accordance with the guidance in ASC 718 ("Stock Compensation"). The Non-Redemption Agreement is representative of a share-based payment transaction in which the Company is acquiring services to be used within the Company's operations. The fair value of the 420,000 Class A Ordinary Shares granted to the Company’s non-redeeming shareholders is $1,132,941 or $2.67-$2.71 per share. The Class A Ordinary Shares were granted subject to a performance condition (i.e., the occurrence of the Business Combination). Compensation expense related to the issuance of shares is recognized only when the performance condition is probable of occurrence under the applicable accounting literature in this circumstance. As of December 31, 2023, the Company determined that a Business Combination is not considered probable, and, therefore, no stock-based compensation expense has been recognized. Stock-based compensation would be recognized at the date a Business Combination is considered probable (i.e., upon consummation of a Business Combination) in an amount equal to the number of issued shares times the grant date fair value per share (unless subsequently modified) less the amount initially received for the purchase of the to be issued shares.
Note 7 - Recurring Fair Value Measurements
As of December 31, 2023 and 2022, the Company’s marketable securities held in the Trust Account were valued at $23,644,203 and $206,887,145, respectively. The marketable securities held in the Trust Account must be recorded on the balance sheets at fair value and are subject to re-measurement at each balance sheet date. With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statements of operations.
The following table presents fair value information as of December 31, 2023 and 2022, of the Company’s financial assets that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. The Company’s marketable securities held in the Trust Account are based on interest income and market fluctuations in the value of invested marketable securities, which are considered observable. The fair value of the marketable securities held in trust are classified within Level 1 of the fair value hierarchy.
The following table sets forth the Company’s assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy:
Schedule Of Fair Value Hierarchy For Assets and Liabilities Measured At Fair Value on a Recurring basis
December 31, 2023
Level 1
Level 2
Level 3
Assets
Investment held in Trust Account
$ 23,644,203
$ -
$ -
December 31, 2022
Level 1
Level 2
Level 3
Assets
Investment held in Trust Account
$ 206,887,145
$ -
$ -
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 8 - Shareholders’ Deficit
Preference Shares - The Company is authorized to issue a total of 5,000,000 preference shares at par value of $0.0001 each. As of December 31, 2023 and 2022, there were no preference shares issued or outstanding.
Class A Ordinary Shares - The Company is authorized to issue a total of 500,000,000 Class A ordinary shares at par value of $0.0001 each. As of December 31, 2023 and 2022, there were no Class A ordinary shares issued or outstanding, excluding 2,167,693 and 20,000,000 Class A ordinary shares subject to possible redemption, respectively.
Class B Ordinary Shares - The Company is authorized to issue a total of 50,000,000 Class B ordinary shares with a par value of $0.0001 per share. As of December 31, 2023 and 2022, the Company had issued 5,000,000 Class B ordinary shares to its initial shareholders for $25,000, or approximately $0.005 per share. On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to cover certain offering and formation costs in exchange for an aggregate of 7,187,500 Founder Shares. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, and in December 2021 a further 31,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination, or earlier at the option of the holder, on a one-for-one basis, subject to adjustment for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions, and subject to further adjustment as provided herein. In the case that additional Class A ordinary shares, or equity-linked securities, are issued or deemed issued in excess of the amounts issued in the Public Offering and related to the closing of the initial Business Combination, the ratio at which the Class B ordinary shares will convert into Class A ordinary shares will be adjusted (unless the holders of a majority of the issued and outstanding Class B ordinary shares agree to waive such anti-dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, 20% of the sum of all ordinary shares issued and outstanding upon the completion of the Public Offering plus all Class A ordinary shares and equity-linked securities issued or deemed issued in connection with the initial Business Combination, excluding any shares or equity-linked securities issued, or to be issued, to any seller in the initial Business Combination. The term “equity-linked securities” refers to any debt or equity securities that are convertible, exercisable or exchangeable for the Class A ordinary shares issued in a financing transaction in connection with the initial Business Combination, including, but not limited to, a private placement of equity or debt.
Public Warrants - Each whole warrant entitles the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to adjustment.
In addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the completion of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummate its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.
Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00.
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Once the warrants become exercisable, the Company may redeem the warrants (except as described herein with respect to the private placement warrants):
● in whole and not in part;
● at a price of $0.01 per warrant;
● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
● if, and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “- Anti-dilution Adjustments”) for any 20 trading days within any 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
The “fair market value” of the Class A ordinary shares shall mean the volume weighted average price of the Class A ordinary shares as reported during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. This redemption feature differs from the warrant redemption features used in some other blank check offerings. The Company will provide its warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Public Offering, except that the Private Placement Warrants and the Class A ordinary shares issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants may be exercised for cash or on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or such purchasers’ permitted transferees. The Private Placement Warrants shall not become Public Warrants as a result of any transfer of the Private Placement Warrants, regardless of the transferee.
If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A ordinary shares and upon completion of such offer, the offeror owns beneficially securities representing more than 50% of the aggregate voting power represented by the issued and outstanding equity securities of the Company, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a shareholder if such warrant had been exercised, accepted such offer and all of the Class A ordinary shares held by such holder had been purchased pursuant to the offer. If less than 70% of the consideration receivable by the holders of the Class A ordinary shares in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value (as defined in the warrant agreement).
PEARL HOLDINGS ACQUISITION CORP
NOTES TO FINANCIAL STATEMENTS
Note 9 - Subsequent Events
On January 5, 2024 upon receipt of a notice of conversion from the Sponsor pursuant to Article 17.2 of the Company’s amended and restated articles of association, the Company converted 3,000,000 of its Class B ordinary shares to Class A ordinary shares on a one-for-one basis. The Sponsor waived any right to receive funds from the Trust Account with respect to the Class A ordinary shares received upon such conversion and no additional amounts were deposited into the Trust Account in respect of any of those Class A ordinary shares. It is stipulated that the newly converted Class A ordinary shares shall be subject to the same lock-up provisions as the original Class B ordinary shares.
On February 22, 2024, The Company entered into a subscription agreement (the “Subscription Agreement”) with the Sponsor and Polar Multi-Strategy Master Fund (“Polar”), pursuant to which, and on the terms and subject to the conditions of which, Polar agreed to contribute up to $500,000 in cash to the Company (the “Capital Contribution”) to cover working capital expenses. In consideration of the Capital Contribution, the Company agreed to issue, or to cause the surviving entity of an initial business combination to issue, one Class A ordinary share (“Common Stock”) for each dollar of the Capital Contribution funded by Polar and received by the Company at or prior to an initial business combination closing (such funded amount, the “Capital Investment”), such Common Stock to be issued no later than two business days following an initial business combination closing (a “De-SPAC Closing”). The Capital Investment is required to be repaid by the Company to Polar upon a De-SPAC Closing, and Polar may elect to receive that repayment either (i) in cash or (ii) in Common Stock at a rate of one share of Common Stock for each $10.00 of Capital Investment. The Company and Sponsor are jointly and severally obligated for such repayment of the Capital Investment upon a De-SPAC Closing. In the event that the Company liquidates without consummating an initial business combination, any amounts remaining in Sponsor’s or the Company’s cash accounts, not including the Company’s trust account, would be applied to the repayment of the Capital Investment, in full satisfaction of any amounts due under the Subscription Agreement.
On February 22, 2024, the Company entered into additional subscription agreements (the “Additional Subscription Agreements”) with five other parties for additional Capital Contributions in the aggregate of $282,000. The terms of the Additional Subscription Agreements are identical to the Subscription Agreement entered into with Polar above.
On March 26, 2024, the Company amended the Investment Management Trust Agreement (the “Trust Agreement”), where, Section 1(c) of the trust agreement was amended and restated in its entirety. As per the amendment, at the written request of the Company, all amounts held in trust are to be deposited in an interest-bearing bank demand deposit account with a maturity of 185 days or less, or in money market funds governed by the Investment Company Act of 1940. On March 26, 2024, the Company transferred substantially all of the assets held in the Trust Account to a demand deposit account held by the Trustee.

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ITEM 9A. CONTROLS AND PROCEDURES

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ITEM 9B. OTHER INFORMATION

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.12
Our current directors and executive officer are as follows:
Name
Age
Title
Craig E. Barnett
Chief Executive Officer and Chairman
Terry Duddy
Vice Chairman and Director
Martin F. Lewis
Managing Director and Chief Financial Officer
Scott M. Napolitano
Managing Director
James E. Lieber
Director
Mary C. Tanner
Director
Laura A. Weil
Director
Craig E. Barnett has been our Chairman and Chief Executive Officer since May 2021. Mr. Barnett has been the Chief Executive Officer of Meadow Lane since 2014 and its associated broker-dealer and predecessor entities since inception and established and manages the global investment team. Mr. Barnett has over 35 years of experience in investment banking, private equity and corporate development and is responsible for Meadow Lane’s partnerships with financing and investment firms. Mr. Barnett has advised clients, pursued investments and overseen corporate development and finance activities with aggregate values exceeding $60 billion primarily in the consumer sectors of the global economy in the United States, Europe and Asia. In addition, Mr. Barnett has been highly active in corporate development, financing and acquisitions for GUS, Experian, Burberry, Argos, Arcade and Shaklee. Previously, Mr. Barnett was a senior executive in private equity and investment banking. He was a Managing Director with Blackstone, a Managing Director with The Bear Stearns Companies, Inc. and a Managing Director with PJ Solomon. Earlier in his career, Mr. Barnett was a Vice President at Lehman Brothers, in London, Tokyo and New York. Mr. Barnett, a graduate of the Wharton School, is active in a number of charitable and community organizations. Mr. Barnett was selected to serve on our board of directors due to his over 35 years of experience in corporate development, financing transactions and mergers and acquisitions.
Terry Duddy has been our Vice Chairman and a member of our board of directors since May 2021. Mr. Duddy has over 30 years of leadership experience with public companies and is a seasoned Chief Executive and digital commerce pioneer. Mr. Duddy has also worked with Meadow Lane principals for over 20 years. Mr. Duddy was a Director and member of the Executive Committee of GUS from 1998 to 2006, having joined as the Chief Executive Officer of Argos. Mr. Duddy was also responsible for the pan-European home shopping division of GUS that, though loss making, was eventually divested for over £800 million. Mr. Duddy was furthermore a member of the GUS board of directors’ Demerger Committee that presided over the demerger process of GUS that included the successful initial public offerings of Burberry, Experian and Home Retail Group. As Chief Executive Officer of Argos and its successor independent entity, Home Retail Group, from 1998 to 2014, Mr. Duddy guided the business through both the extensive digital transformation of the industry as well as the downturn of 2009. Argos was the UK’s first multichannel retailer with its e-commerce site and home delivery service launching in 1999 with over 20,000 product lines and a considerable private label brand. Mr. Duddy managed a $2 billion supply chain sourced from China, incubated emerging products, created new marketing technologies including the now ubiquitous and innovative “Click & Collect” sale and mentored a new generation of managers now in industry leadership positions. Most recently, Mr. Duddy was first Senior Independent Director and then Interim Board Chairman of Debenhams plc, which he managed through administration, secured financing for a successful reorganization and recruited a new Board. Mr. Duddy has been a member of True Capital Management’s advisory board since 2014, is the Chairman of London Marathon Events Ltd and is or has been a non-executive director of a number of other companies including Hammerson plc and Majid Al Futtaim Properties LLC. Mr. Duddy was selected to serve on our board of directors due to his lengthy and comprehensive experience in public company governance as both a director and an executive officer.
Note to Pearl: Have there been any updates to the director bios below? Have any of the directors worked on additional subsequent SPACs? We will need to add the updates in the conflicts of interest disclosure.
Martin F. Lewis has been our Chief Financial Officer and one of our Managing Directors since May 2021. Mr. Lewis has over 35 years of leadership experience in investment banking. He is the founder and Managing Principal, since 2014, of Gower Advisers, a financial advisory boutique in New York. He has also served as a Managing Principal of Meadow Lane since 2014. Previously, Mr. Lewis was a Managing Director with Greenhill, a founding member of Miller, Buckfire Lewis & Co (now Miller Buckfire), a Managing Director of Wasserstein Perella and a Managing Director of Blackstone. Mr. Lewis was also associated with Chemical Bank in London and New York and with NM Rothschild in London and Mexico. Mr. Lewis qualified as a Chartered Accountant in the UK and graduated with an M.A. from Oxford University.
Scott M. Napolitano has been one of our Managing Directors since May 2021. Mr. Napolitano has over 20 years of experience in investment banking acting as strategic and capital advisor to companies and private equity firms, principally in the healthcare and consumer sectors, evaluating mergers, acquisitions and strategic and financing alternatives. Mr. Napolitano is Managing Member of Scott Michael Partners LLC, an advisory and investment firm he founded in 2020 with a focus on healthcare and technology. Prior to founding Scott Michael Partners LLC, Mr. Napolitano served as Managing Director with Nomura Securities International from 2014 to 2020 where he was Head of MedTech Investment Banking and Healthcare M&A. Previously, he was a Managing Principal with Meadow Lane. Mr. Napolitano has also held senior investment banking positions with PJ Solomon, where he served as Managing Director and with The Goldman Sachs Group, Inc. and J.P. Morgan Chase & Co., where he served as Vice President. Mr. Napolitano is a graduate of Columbia University.
James E. Lieber has served as one of our directors since December 2021. Mr. Lieber has more than 25 years of experience in the strategic management of complex international projects and situations for multi-national corporations, investment funds, organizations and high net-worth individuals in Europe and the United States. Mr. Lieber is Founder and President of Lieber Strategies, a consultancy based in Paris. Prior to founding Lieber Strategies in 2004, Mr. Lieber served from 1997 to 2004 as Director of Corporate Affairs at LVMH, working with its chairman, Bernard Arnault, and his executive committee on major strategic projects. Mr. Lieber directed LVMH’s strategy in several multi-billion-dollar transactions and business conflicts and managed LVMH’s interests in international trade disputes and European competition clearance situations and other government relations matters. Before joining LVMH, Mr. Lieber practiced law with Cleary, Gottlieb, Steen & Hamilton LLP, where he worked in New York on international securities offerings, privatizations and real estate transactions, and in Paris representing clients in cross-border acquisitions and joint ventures in the media, luxury goods and pharmaceuticals sectors. Mr. Lieber is a director of numerous companies, including LVMH Moet Hennessy Louis Vuitton Inc., DFS Group and Gabriel Resources Ltd. He was formerly a director of Stanhope Capital Group, a private wealth manager and of Cheyne Capital Holdings, a hedge fund group. He is also a director of not for profit organizations including the French-American Foundation and Literacy Inc. and is a member of Panthera’s Conservation Council and a Friend of the Foundation for Jewish Heritage. Mr. Lieber is an attorney admitted to practice in the State of New York and a member of the Council on Foreign Relations and the Global Advisory Council of the Woodrow Wilson Center for International Scholars. Mr. Lieber holds a Juris Doctor degree cum laude from Northwestern University School of Law in Chicago, Illinois, where he was a member of the Order of the Coif, and a Master in Public Policy from Harvard University’s Kennedy School of Government, in Cambridge, Massachusetts. He received his Bachelor of Arts from Wesleyan University in Middletown, Connecticut, with honors in art history. Mr. Lieber was selected to serve on our board of directors due to his extensive experience as a strategic advisor to multinational businesses and his experience as a board member of public and private companies.
Mary C. Tanner has served as one of our directors since December 2021. Ms. Tanner has more than 30 years of leadership experience in investment banking and has served as a director on numerous private and public companies. Ms. Tanner is Senior Managing Director of ELSP, of which she is a co-founder. Ms. Tanner specializes in healthcare investment and strategic advisory work, including mergers and acquisitions, licensing, corporate minority strategic investments and fund raising. Ms. Tanner is also an active venture capital investor. Before founding ELSP with her husband and long standing business partner, Frederick Frank, Ms. Tanner held leadership positions for over 20 years in investment banking at Lehman Brothers, Bear Stearns and PJ Solomon. Ms. Tanner has directed over 500 mergers and acquisitions, over 130 initial public offerings and hundreds of financings and is highly experienced in mergers involving spinoffs of public companies. Ms. Tanner has significant expertise in life sciences, traditional pharmaceutical industries and consumer healthcare. Advisory clients of Ms. Tanner have included Pfizer Inc., Block Drug, Amgen Inc., Rhône-Poulenc S.A., Marion Merrell Dow, Inc., BASF SE, Sanofi S.A., Revlon, Inc., Fabergé and L’Oréal S.A. Ms. Tanner was a 10-year member of the board of directors of Lineagen, Inc., a molecular diagnostic company, which was merged with Bionano Genomics, Inc. in 2021, and she
was Chair of its Audit and Compliance Committee. As a member of the board of directors of Genticel, S.A., an immune oncology company in France, she assisted in merging the company with Genkyotex, a Swiss/French publicly listed company, in a cross border transaction with Calliditas Therapeutics AB, a Swedish, Nasdaq-listed company. Previously, for a decade, she served on the board of directors of Evotec SE, a German company which is one of the largest companies in early stage contract research organization research. Ms. Tanner previously served on the board of directors of the consumer products company Block Drug prior to its sale to GlaxoSmithKline plc.
Ms. Tanner received a B.A. magna cum laude from Harvard University. She serves on the Advisory Board of the Yale School of Management and recently stepped down as an advisor to the Blavatnik Fund for Innovation at Yale and the Yale Center for Biomedical Innovation and Technology. Ms. Tanner was selected to serve on our board of directors due to her extensive experience directing mergers and acquisitions and serving on public company boards of directors.
Laura A. Weil has served as one of our directors since December 2021. Ms. Weil has over 25 years of corporate leadership experience. Ms. Weil has been an independent director of Carnival Corporation since 2007. She is the chair of the audit committee and a member of the compliance and compensation committees. She is also an independent director of Global Fashion Group, SA since 2019 and the chair of its audit committee. She previously served as a Director of Christopher & Banks Corporation. Ms. Weil is the Founder and has been the Managing Partner of Village Lane Advisory LLC, which specializes in providing executive and strategic consulting services to retailers as well as private equity firms, since 2015. Previously, Ms. Weil was the Executive Vice President and Chief Operating Officer of New York & Company, Inc., the Chief Executive Officer of Ashley Stewart LLC, the Chief Executive Officer of Urban Brands, Inc., the Chief Operating Officer of AnnTaylor Stores Corporation, the Chief Financial Officer of American Eagle Outfitters, Inc., and the Vice President Finance and CFO Credit Operations for Macy’s Inc. Ms. Weil was also a senior executive with investment banking firms including Oppenheimer and Lehman Brothers. Ms. Weil received a B.A. in Art History and Government from Smith College and an MBA from Columbia University Business School. Ms. Weil was selected to serve on our board of directors due to her extensive financial expertise and substantial experience in public company governance as a director and an executive officer.
Advisory Board
In addition to our team described above, the following individuals serve on our advisory board:
Victor J. Barnett has considerable experience as a successful investor in and leader of multiple global businesses. Mr. Barnett was a Director and member of the Executive Committee directing the affairs of GUS for over 20 years. Mr. Barnett also served as the Executive Chairman of Burberry and was the chief visionary for its operational reorganization and transformation. Mr. Barnett also led the global expansion, via $2.7 billion of acquisitions, of Experian. Mr. Barnett was previously a Director of Revlon and of various other private companies.
David C. Blatte has over 30 years of investment banking and private equity investing experience in the consumer and retail industry sectors. He is also a seasoned operating executive in the pet industry. He is the Chairman of Worldwise, Inc., one of the five largest pet accessory companies in the U.S., and was the Founder and CEO of Quaker Pet Group, one of Worldwise’s operating businesses. Mr. Blatte is a former Partner at Centre Partners, a former Partner at Catterton Partners, and a former Managing Director at Donaldson Lufkin & Jenrette Securities Corp. He holds a B.S. from the Wharton School of Business of the University of Pennsylvania.
Noah Gottdiener has 35 years of corporate leadership and investment banking experience. Mr. Gottdiener is the Executive Chairman of Kroll, formerly Duff & Phelps Corp., and chairs Kroll’s board of directors. He served as Chief Executive Officer and Chairman of the Board from 2004 to 2020. During that time, revenue increased from $30 million in 2004 to over $1 billion. Kroll has nearly 5,000 professionals in 30 countries and territories around the world. Mr. Gottdiener guided Kroll through a series of acquisitions, an initial public offering and a subsequent going private transaction. In April 2020, Mr. Gottdiener led Kroll through a $4.2 billion acquisition by a global investor consortium. Previously, Mr. Gottdiener was a Partner with Thomas Weisel Partners and Furman Selz LLC, and a Managing Director at Lehman Brothers Holdings Inc., where he began his career. Mr. Gottdiener is a member of the Council on Foreign Relations and sits on the Board of Trustees of the National Outdoor Leadership School (NOLS). He is a member of the Black Rock Forest Consortium Leadership Council and on the Board of Directors of AZTherapies. He is a former member of the board of trustees of The Brearley School and the Princeton School of Public and International Affairs.
Brandon Ralph is the Founder and Chief Executive Officer of The Unquantifiable, a marketing services consultancy. He has over 20 years of experience navigating consumer content distribution and consumption behavior as a creative leader in omni-channel content-concentric marketing strategies. Mr. Ralph is a Founder and, for seventeen years, was the Chief Creative Officer of Code and Theory, an independent digital first creative agency. At Code and Theory, Mr. Ralph led the creative teams for over 70 fashion, lifestyle, media, and entertainment brands for publishers, including Vice, NBC Olympics, The Huffington Post, Bloomberg, and The Verge. He has also been a trusted creative collaborator for Anna Wintour, Arianna Huffington, Tina Brown, David Carey and Tomas Maier. His unique ability to learn customer behaviors and amplify brands has afforded him the opportunity to deliver award-winning strategies across a broad spectrum of industries. Mr. Ralph’s clients have included Bottega Venetta, Hermes, Burger King and Dr Pepper Snapple Group. Mr. Ralph has also served as the Chief Experience Officer and Chief Creative officer of Equinox Fitness Holdings and as the Chief Creative Officer of NJOY.
Carlos Rohm has been Chief Executive Officer of LCA Capital, a family office with ties to Mexico, since 2007. Previously, Mr. Rohm was a Principal of JPMorgan Partners. Mr. Rohm has been a director of and is a member of the Operating Committee of Grupo Aeroportuario del Pacifico. He is also a director of FIBRA Storage and Liv Capital Acquisition Corp., a special purpose acquisition company.
Ronald Stern is a highly experienced marketing and operations executive who has also been actively involved in evaluating and pursuing investment opportunities with Meadow Lane. Mr. Stern was the President and a long-time executive of SlimFast prior to its sale for $2 billion to Unilever PLC and subsequently served as a Consultant to Unilever. Mr. Stern is an active angel investor in emerging companies and advises a number of consumer-facing and health oriented businesses.
Jonathan H. Weis has over 30 years of corporate leadership experience. He has been the Chairman, President and Chief Executive Officer of Weis Markets, a leading regional supermarket chain with over 23,000 employees and 197 stores, since 2014 and has served in executive capacities with Weis Markets since 1989. Under the leadership of Mr. Weis, Weis Markets has expanded its operations significantly both organically and via acquisition and has maintained its market position in a highly competitive environment. Mr. Weis has also been responsible for establishing and implementing major strategic initiatives that reflect Weis Markets’ focus on understanding continuously evolving consumer perspectives, optimizing organizational issues with respect to human capital and operational capabilities and controlling, increasing and maximizing the considerable intellectual property associated with Weis Markets.
Our advisory board members (i) assist us in sourcing potential business combination targets, (ii) provide their business insights when we assess potential business combination targets and (iii) upon our request, provide their business insights as we work to create additional value in the businesses that we acquire. In this regard, they fulfill some of the same functions as our board members. However, our advisory board members do not perform board or committee functions, nor do they have any voting or decision making capacity on our behalf. They are also not subject to the fiduciary requirements to which our board members are subject. We may modify or expand our roster of advisory board members as we source potential business combination targets or create value in businesses that we may pursue or acquire.
Director Independence
Nasdaq listing standards require that a majority of our board of directors be independent within one year of our Initial Public Offering. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. We have three “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our board has determined that each of James E. Lieber, Mary C. Tanner and Laura A. Weil is an independent director under applicable SEC rules and the Nasdaq listing standards.
Our independent directors have regularly scheduled meetings at which only independent directors are present.
Number, Terms of Office and Election of Officers and Director
Our board of directors consists of five members. Prior to our initial Business Combination, holders of our Founder Shares will have the right to appoint all of our directors and remove members of our board of directors for any reason, and holders of our Public Shares will not have the right to vote on the appointment of directors during such time. These provisions of our Charter may only be amended by a special resolution passed by the holders of a majority of at least 90% of our ordinary shares attending and voting in a general meeting. Each of our directors will hold office for a two-year term. Subject to any other special rights applicable to the shareholders, any vacancies on our board of directors may be filled by the affirmative vote of a majority of the directors present and voting at the meeting of our board of directors or by a majority of the holders of our ordinary shares (or, prior to our initial Business Combination, holders of our Founder Shares).
Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of directors is authorized to appoint persons to the offices set forth in our Charter as it deems appropriate. Our Charter provides that our officers may consist of a Chairman, a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.
Committees of the Board of Directors
We have established three standing committees - an audit committee, a compensation committee and a nominating and corporate governance committee, each composed of independent directors. Each committee operates under a charter that was approved by our board of directors and has the composition and responsibilities described below. The charter of each committee is available on our website.
Audit Committee
The members of our audit committee are Mary C. Tanner, James E. Lieber and Laura A. Weil. Mary C. Tanner serves as chair of the audit committee.
Each member of the audit committee is financially literate and our board of directors has determined that each of Mary C. Tanner, James E. Lieber and Laura A. Weil qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.
We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:
● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm;
● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;
● pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
● reviewing and discussing with the independent registered public accounting firm all relationships the auditors have with us in order to evaluate their continued independence;
● setting clear hiring policies for employees or former employees of the independent registered public accounting firm;
● setting clear policies for audit partner rotation in compliance with applicable laws and regulations;
● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;
● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.
Compensation Committee
The members of our compensation committee are Laura A. Weil, James E. Lieber and Mary C. Tanner. Laura A. Weil serves as chair of the compensation committee. We have adopted a compensation committee charter, which details the purpose and responsibility of the compensation committee, including:
● reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;
● reviewing and making recommendations to our board of directors with respect to the compensation, and any incentive-compensation and equity-based plans that are subject to board approval of all of our other officers;
● reviewing our executive compensation policies and plans;
● implementing and administering our incentive compensation equity-based remuneration plans;
● assisting management in complying with our proxy statement and annual report disclosure requirements;
● approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
● producing a report on executive compensation to be included in our annual proxy statement; and
● reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.
Nominating and Corporate Governance Committee
The members of our nominating and corporate governance committee are James E. Lieber, Mary C. Tanner, and Laura A. Weil. James E. Lieber will serve as chair of the nominating and corporate governance committee. We have adopted a nominating and corporate governance committee charter, which details the purpose and responsibilities of the nominating and corporate governance committee, including:
● identifying, screening and reviewing individuals qualified to serve as directors, consistent with criteria approved by the board of directors, and recommending to the board of directors candidates for nomination for election at the annual stockholder meeting or to fill vacancies on the board of directors;
● developing and recommending to the board of directors and overseeing implementation of our corporate governance guidelines;
● coordinating and overseeing the annual self-evaluation of the board of directors, its committees, individual directors and management in the governance of the Company; and
● reviewing on a regular basis our overall corporate governance and recommending improvements as and when necessary.
The charter also provides that the nominating and corporate governance committee may, in its sole discretion, retain or obtain the advice of, and terminate, any search firm to be used to identify director candidates, and is directly responsible for approving the search firm’s fees and other retention terms.
We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders. Prior to our initial Business Combination, holders of our Public Shares will not have the right to recommend director candidates for nomination to our board of directors.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent stockholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to us, or written representations that no Forms 5 were required, we believe that, during the fiscal year ended December 31, 2023, all Section 16(a) filing requirements applicable to our officers and directors were complied with.
Code of Ethics
We have adopted a code of ethics and business conduct (our “Code of Ethics”) applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics as an exhibit to this Annual Report. We have also posted a copy of our Code of Ethics and the charters of our audit committee, compensation committee and nominating and corporate governance committee on our website (PearlHAC.com) under “Corporate Governance”. Our website and the information contained on, or that can be accessed through, the website is not deemed to be incorporated by reference in, and is not considered part of, this Annual Report. You are able to review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.
Conflicts of Interest
Under Cayman Islands law, directors and officers owe the following fiduciary duties:
● duty to act in good faith in what the director or officer believes to be in the best interests of the company as a whole;
● duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;
● duty to not improperly fetter the exercise of future discretion;
● duty to exercise powers fairly as between different sections of shareholders;
● duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
● duty to exercise independent judgment.
In addition to the above, directors also owe a duty of care, which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge, skill and experience which that director has.
As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders; provided that there is full disclosure by the directors. This can be done by way of permission granted in the Charter or alternatively by shareholder approval at general meetings.
Our team, in their capacities as directors, officers or employees of our Sponsor or its affiliates or in their other endeavors, may choose to present potential Business Combinations to the related entities described above, current or future entities affiliated with or managed by our Sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties.
Certain members of our team have fiduciary duties to Meadow Lane and to certain companies in which Meadow Lane has invested. These entities may compete with us for acquisition opportunities. If these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities. None of the members of our team who are also employed by our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential Business Combination of which they become aware, subject to his or her fiduciary duties under Cayman Islands law. Our officers, directors and members of our Advisory Board have agreed not to participate in the formation of, or become an officer, director or strategic advisor of, any other special purpose acquisition company with a class of securities registered under the Exchange Act without our prior written consent, which will not be unreasonably withheld.
Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a Business Combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a Business Combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such Business Combination opportunity to such entity, or in the case of a non-compete restriction, may not present such opportunity to us at all, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate
opportunity for any director or officer, on the one hand, and us, on the other. Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence. See “Item 1.A. Risk Factors -Certain of our directors, officers and advisory board members are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
In addition, our Sponsor, its members, our officers or our directors or their respective affiliates may be investors, or have other direct or indirect interests, in a business with which we may enter into a Business Combination agreement and/or in certain funds or other persons that own Public Shares or that may otherwise purchase our Class A ordinary shares in the public market.
We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company. Such advisors’ roles with respect to our Company is expected to be primarily passive and advisory in nature. Our advisory board members may have fiduciary and/or contractual duties to certain companies but do not have any fiduciary obligations to our Company. As a result, our advisory board members may have a duty to offer Business Combination opportunities to certain other companies before our Company. Additionally, certain companies affiliated with our advisory board members may enter into transactions with, provide goods or services to, or receive goods or services from an entity with which we seek to complete our initial Business Combination. Transactions of these types may present a conflict of interest because our advisory board members may directly or indirectly receive a financial benefit as a result of such transaction. See “Item 1.A. Risk Factors -Our advisory board members are not under any obligation to source any potential opportunities for our initial Business Combination or refer any such opportunities to our Company or provide any other services for our Company.”
Potential investors should also be aware of the following potential conflicts of interest:
● Our Chairman intends to devote a majority of his time to our affairs, however, none of our directors or officers are required to commit his or her full time to our affairs and, accordingly, may have conflicts of interest in allocating his or her time among various business activities.
● In the course of their other business activities, our directors and officers may become aware of investment and business opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Our management may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
● Pursuant to a letter agreement entered into with us, our initial shareholders, directors and officers have agreed to waive their redemption rights with respect to any Founder Shares and Public Shares held by them in connection with the consummation of our initial Business Combination. Additionally, our initial shareholders have agreed to waive their redemption rights with respect to their Founder Shares if we fail to consummate our initial Business Combination by December 17, 2024. However, if our initial shareholders (or any of our directors, officers or affiliates) acquire Public Shares, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if we fail to consummate our initial Business Combination within the prescribed time frame. If we do not complete our initial Business Combination within such applicable time period, the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of our Public Shares, and the Private Placement Warrants will expire worthless. With certain limited exceptions, pursuant to such letter agreement, our initial shareholders, directors and officers have agreed not to transfer, assign or sell their Founder Shares until the earlier of: (1) one year after the completion of our initial Business Combination; and (2) subsequent to our initial Business Combination (x) if the last reported sale price of our Class A
ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 120 days after our initial Business Combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of our Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. With certain limited exceptions, the Private Placement Warrants and the ordinary shares underlying such warrants, will not be transferable, assignable or salable by our Sponsor until 30 days after the completion of our initial Business Combination. Since our Sponsor and our team may directly or indirectly own ordinary shares and warrants, our directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial Business Combination.
● Our directors and officers may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination. These agreements may provide for them to receive compensation following our initial Business Combination and, as a result, may cause them to have conflicts of interest in determining whether to proceed with a particular Business Combination.
● Our directors and officers may have a conflict of interest with respect to evaluating a particular Business Combination if the retention or resignation of any such directors and officers was included by a target business as a condition to any agreement with respect to our initial Business Combination.
The conflicts described above may not be resolved in our favor.
Accordingly, as a result of multiple business affiliations, our directors and officers have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. Below is a table summarizing the entities to which our directors and officers currently have fiduciary duties or contractual obligations:13
Individual
Entity
Entity’s Business
Affiliation
Craig E. Barnett
Meadow Lane Capital
Investments
Chief Executive Officer
Barnett & Partners Advisors, LLC
Advisory services
Chief Executive Officer
Terry Duddy
Majid Al Futtaim Properties LLC
Property Management
Non-Executive Director
Catch 22 Charity Ltd
Charity
Non-Executive Chair
London Marathon Events Ltd
Charity
Non-Executive Chair
Martin F. Lewis
Meadow Lane Capital
Investments
Managing Principal
MM Dillon & Co.
Advisory services
Managing Director
Scott M. Napolitano
Scott Michael Partners LLC
Advisory services
Managing Member
James E. Lieber
Lieber Strategies
Consulting
Founder and President
LVMH Moet Hennessy Louis Vuitton Inc.
Consumer goods
Director
DFS Group
Consumer goods
Director
Gabriel Resources Ltd.
Mining
Director
Stanhope Capital Group
Wealth management
Director
Mary C. Tanner
EVOLUTION Life Sciences Partners
Advisory services
Co-Founder and Senior Managing Director
Laura A. Weil
Carnival Corporation
Global Fashion Group, SA
Tourism
Consumer goods
Director
Director
Village Lane Advisory LLC
Consulting
Founder and Managing Partner
Note to Pearl: Please confirm if any updates.
Accordingly, if any of the above directors or officers become aware of a Business Combination opportunity which is suitable for any of the above entities to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such Business Combination opportunity to such entity, and only present it to us if such entity rejects the opportunity, subject to his or her fiduciary duties under Cayman Islands law. Our Charter provides that, to the fullest extent permitted by applicable law: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us; and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other. We do not believe, however, that any of the foregoing fiduciary duties or contractual obligations will materially affect our ability to identify and pursue Business Combination opportunities or complete our initial Business Combination.
We are not prohibited from pursuing an initial Business Combination with a company that is affiliated with our Sponsor, directors or officers. In the event we seek to complete our initial Business Combination with such a company, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such an initial Business Combination is fair to our Company from a financial point of view. Unless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our Company from a financial point of view.
In addition, our Sponsor or any of its affiliates may make additional investments in the Company in connection with the initial Business Combination, although our Sponsor and its affiliates have no obligation or current intention to do so. If our Sponsor or any of its affiliates elects to make additional investments, such proposed investments could influence our Sponsor’s motivation to complete an initial Business Combination.
In the event that we submit our initial Business Combination to our Public Shareholders for a vote, our initial shareholders, directors and officers have agreed, pursuant to the terms of a letter agreement entered into with us, to vote any Founder Shares (and their permitted transferees will agree) and Public Shares held by them in favor of our initial Business Combination.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
None of our directors or officers have received any cash compensation for services rendered to us. Commencing on the date that our securities are first listed on Nasdaq through the earlier of consummation of our initial Business Combination and our liquidation, we will pay our Sponsor a total of $15,000 per month for office space, administrative and support services. Our Sponsor, directors and officers, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. Our audit committee will review on a quarterly basis all payments that were made by us to our Sponsor, directors, officers or our or any of their affiliates.
After the completion of our initial Business Combination, directors or members of our team who remain with us may be paid consulting, management or other compensation from the combined company. All compensation will be fully disclosed to shareholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our shareholders in connection with a proposed Business Combination. It is unlikely the amount of such compensation will be known at the time, because the directors of the post-combination business will be responsible for determining executive officer and director compensation. Any compensation to be paid to our officers after the completion of our initial Business Combination will be determined by a compensation committee constituted solely by independent directors.
We are not party to any agreements with our directors and officers that provide for benefits upon termination of employment. The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial Business Combination should be a determining factor in our decision to proceed with any potential Business Combination.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table sets forth information available to us at April 16, 2024 with respect to our ordinary shares held by:
● each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
● each of our executive officers and directors; and
● all our executive officers and directors as a group.
Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. The following table does not reflect record or beneficial ownership of the Private Placement Warrants as these are not exercisable within 60 days of April 16, 2024.
Class A
Ordinary Shares
Class B
Ordinary Shares(1)
Beneficially
Owned
Approximate
Percentage
of Class
Beneficially
Owned
Approximate
Percentage
of Class
Approximate
Percentage of
Outstanding
Ordinary
Shares
Name and Address of Beneficial Owner(2)
Pearl Holdings Sponsor LLC (our Sponsor)(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Craig E. Barnett(3)
3,000,000
58.1 %
2,000,000
100.0 %
69.8
%
Terry Duddy
-
-
-
-
Martin F. Lewis
-
-
-
-
Scott M. Napolitano
-
-
-
-
James E. Lieber
-
-
-
-
Mary C. Tanner
-
-
-
-
Laura A. Weil
-
-
-
-
All directors and officers as a group (7 individuals)
3,000,000
58.1
%
2,000,000
100.0 %
69.8
%
Polar Asset Management Partners Inc.(4)
250,000
4.8
%
3.5
%
Mangrove Partners IM, LLC(5)
249,158
4.8
%
3.5 %
SZOP Multistrat LP(6)
297,903
5.8 %
4.2
%
Sandia Investment Management L.P.(7)
125,000
2.4 %
1.7 %
* Less than one percent.
(1) Class B ordinary shares will convert into Class A ordinary shares on a one-for-one basis, subject to adjustment, as described in the section entitled “Description of Securities” in our prospectus filed with the SEC pursuant to Rule 424(b)(4) (File No. 333-261319).
(2) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Pearl Holdings Acquisition Corp, 767 Third Avenue, 11th Floor, New York, New York 10017.
(3) Pearl Holdings Sponsor LLC, our Sponsor, is the record holder of the 5,000,000 Founder Shares reported herein. The manager of our Sponsor is Craig E. Barnett. By virtue of his control over our Sponsor, Craig E. Barnett may be deemed to beneficially own shares held by our Sponsor.
(4)
According to a Schedule 13G filed on January 10, 2024, Polar Asset Management Partners Inc. has sole voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting person is 16 York Street, Suite 2900, Toronto, ON, Canada M5J 0E6.
(5) According to a Schedule 13G filed on January 10, 2024, Mangrove Partners IM, LLC and Nathaniel August have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the principal business office of Mangrove Partners IM, LLC is c/o Delaware Corporations LLC, 1000 N. West Street, Suite 1501, Wilmington, DE 19801. The address of the principal business office of Nathaniel August is 2 Sound View Drive, 3rd Floor, Greenwich, Connecticut 06830.
(6) According to a Schedule 13G filed on January 22, 2024, SZOP Multistrat LP, SZOP Multistrat Management LLC, Antonio Ruiz-Gimenez and Kerry Propper have shared voting and dispositive power over the Class A ordinary shares reported herein. The address of the reporting persons is 17 State Street, Suite 2130, New York, NY 10004.
(7) According to a Schedule 13G filed on February 14, 2024, Sandia Investment Management L.P. and Timothy J. Sichler held 125,000 Class A ordinary shares. The address of the principal business office of each of Sandia Investment Management L.P. and Timothy J. Sichler is 201 Washington Street, Boston, MA 02108.
Our initial shareholders beneficially own approximately 69.8% of the issued and outstanding ordinary shares and have the right to elect all of our directors prior to our initial Business Combination as a result of holding all of the Founder Shares. Holders of our Public Shares will not have the right to appoint any directors to our board of directors prior to our initial Business Combination. In addition, because of their ownership block, our initial shareholders may be able to effectively influence the outcome of all other matters requiring approval by our shareholders, including amendments to our Charter and approval of significant corporate transactions.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Founder Shares
On April 3, 2021, the Sponsor paid $25,000, or approximately $0.003 per share, to purchase an aggregate of 7,187,500 Class B ordinary shares, par value $0.0001 per share. In November 2021, the Sponsor surrendered an aggregate of 2,156,250 Founder Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,031,250, resulting in an effective purchase price paid for the Founder Shares of approximately $0.005 per share. On December 22, 2021, 2022, due to the partial exercise of the over-allotment option by the underwriter of the Initial Public Offering, the Sponsor forfeited 31,250 Class B Ordinary Shares for no consideration, thereby reducing the aggregate number of Founder Shares outstanding to 5,000,000.
The initial shareholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (1) one year after the completion of the initial Business Combination; or (2) subsequent to the initial Business Combination (i) if the last reported sale price of the Class A ordinary shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, consolidations, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the Public Shareholders having the right to exchange their ordinary shares for cash, securities or other property. Any permitted transferees would be subject to the same restrictions and other agreements of the initial shareholders with respect to any Founder Shares.
Private Placement Warrants
Simultaneously with the closing of our Initial Public Offering our Sponsor purchased an aggregate of 9,000,000 Private Placement Warrants, each exercisable to purchase one Class A ordinary share at $11.50 per share, at a price of $1.00 per warrant, or $9,000,000 in the aggregate. Simultaneously with the closing of the over-allotment, the Sponsor purchased an additional 1,000,000 Private Placement Warrants, for an aggregate of $1,000,000.
A portion of the proceeds from the Private Placement Warrants was added to the proceeds from the Initial Public Offering and deposited in the Trust Account. If we do not complete a Business Combination within the Combination Period, the proceeds of the sale of the Private Placement Warrants will be used to fund the redemption of our Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
Letter Agreement
Our Sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with the completion of our initial Business Combination, (B) to waive their redemption rights with respect to any Founder Shares and Public Shares they hold in connection with a shareholder vote to approve an amendment to our amended and restated certificate of incorporation to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our Public Shares if we have not consummated an initial Business Combination by December 17, 2024 or with respect to any other provisions relating to shareholders’ rights or pre-initial Business Combination activity and (C) to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if we fail to complete an initial Business Combination by December 17, 2024, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if we fail to complete an initial Business Combination within such time period, and (iii) the Founder Shares are automatically convertible into Class A ordinary shares concurrently with or immediately following the consummation of an initial Business Combination on a one-for-one basis, subject to adjustment as described in our amended and restated certificate of incorporation. If we submit an initial Business Combination to our Public Shareholders for a vote, our initial shareholders have agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering in favor of the initial Business Combination.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued on conversion of Working Capital Loans (and any Class A ordinary shares issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to the Class A ordinary shares). The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that we register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of the initial Business Combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration rights agreement provides that we will not be required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period. We will bear the expenses incurred in connection with the filing of any such registration statements.
Related Party Notes
On April 1, 2021, the Sponsor agreed to loan the Company up to $300,000 to be used for a portion of the expenses of the Initial Public Offering. These loans are non-interest bearing, unsecured and were due at the earlier of December 31, 2021 or the closing of the Initial Public Offering. The outstanding loan of $244,648 was repaid upon the closing of the Initial Public Offering out of the offering proceeds not held in the Trust Account. As of December 31, 2021, the Company had no outstanding borrowings under the promissory note.
Administrative Services Agreement
Commencing on the date that the Company’s securities are first listed on the NASDAQ through the earlier of consummation of the initial Business Combination and the liquidation, the Company has agreed to pay the Sponsor a total of $15,000 per month for office space, utilities, administrative and support services.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services.
BDO USA, P.C. (“BDO”), an independent registered public accounting firm, has served as our auditor since 2021.
The following is a summary of fees paid or to be paid to BDO for services rendered.
For the
Year ended
December 31,
For the
Year ended
December 31,
Audit Fees(1)
$ 113,112
$ 75,825
Audit-Related Fees(2)
$ -
$ -
Tax Fees(3)
$ -
$ -
All Other Fees(4)
$ -
$ -
Total
$ 113,112
$ 75,825
(1) Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings.
(2) Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultation concerning financial accounting and reporting standards.
(3) Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.
(4) All Other Fees. All other fees consist of fees billed for all other services including permitted due diligence services related potential Business Combination.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Initial Public Offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
Part IV.

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Form 10-K:
(1) Financial Statements:
Page
Report of Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations
Statements Of Class A Ordinary Shares Subject To Possible Redemption And Changes In Shareholders’ Deficit
Statements of Cash Flows
Notes to Financial Statements to
(2) Financial Statement Schedules:
None.
(3) Exhibits
We hereby file as part of this Report the exhibits listed in the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of such material can also be obtained from the Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.
No.
Description of Exhibit
3.1(1)
Amended and Restated Memorandum and Articles of Association of the Company.
3.2(2)
Amendment to Amended and Restated Memorandum and Articles of Association of the Company.
4.2(3)
Description of the Company’s securities.
10.1(4)
Form of Non-Redemption Agreement.
10.2(2)
Amendment to Investment Management Trust Agreement, dated December 8, 2023, by and between the Company and Continental Stock Transfer & Trust Company, as trustee.
10.2(5)
Subscription Agreement, dated February 22, 2024, by and among Pearl Holdings Acquisition Corp, Pearl Holdings Sponsor LLC and Polar Multi-Strategy Master Fund.
14.1(3)
Code of Ethics and Business Conduct of Pearl Holdings Acquisition Corp
31.1*
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97.1*
Clawback Policy of the Company.
101.INS*
XBRL Instance Document.
101.SCH*
XBRL Taxonomy Extension Schema Document.
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document.
* Filed herewith.
** Furnished herewith.
(1) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 17, 2021.
(2) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 14, 2023.
(3) Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2022.
(4) Incorporated by reference to the Company’s Current Report on Form 8-K filed on December 11, 2023.
(5) Incorporated by reference to the Company’s Current Report on Form 8-K filed on February 28, 2024.