Aeries Technology, Inc. quarterly report, Q1 FY2024

Business context and reporting period

Important entity distinction: Despite the request metadata naming Aeries Technology, Inc., this filing is Worldwide Webb Acquisition Corp. (WWAC), a shell SPAC, for the quarter and six months ended June 30, 2023. Aeries Technology Group Business Accelerators Private Limited is a subsidiary of AARK, the SPAC’s proposed business-combination target. The unaudited financial statements are in U.S. dollars.

WWAC had not commenced operating activities and had no operating revenue. It entered into a business combination agreement with AARK and its amalgamation subsidiary on March 11, 2023. A June 1 PIPE agreement provides for a proposed $5.0 million investment for 1,033,058 Class A shares, conditional on closing the business combination; no PIPE shares had been issued by June 30.

Key financial metrics

Quarterly and six-month net income reflected non-operating items, including gains from changes in warrant-liability fair value of $1.80 million and $167,280, respectively, and trust-account investment income/gains of $1.71 million and $4.08 million. Net income therefore does not represent operating profitability.

At June 30, cash outside the trust was $41,844; trust-account marketable securities were $49.36 million. Current liabilities were $7.94 million, total liabilities $8.38 million, and working capital deficit $7.74 million. The company reported a $548,413 non-interest-bearing promissory note payable to its sponsor; the filing also discloses $222,716 owed to the sponsor for other expenses. No conventional revenue-generating business debt or operating margins are reported. Shareholders’ deficit was $8.09 million.

Material changes versus prior comparable periods

• Second-quarter net income declined to $2.03 million from $6.17 million a year earlier; six-month net income fell to $0.50 million from $9.97 million. The prior-year periods had substantially larger warrant-liability fair-value gains.
• G&A increased to $1.48 million for the quarter from $294,683 and to $3.75 million for six months from $657,321.
• On April 14, 2023, shareholders approved an extension to October 22, 2023, the deadline to complete a business combination. Holders redeemed 18,281,946 Class A shares for $189.43 million, leaving 4,718,054 redeemable Class A shares. The trust balance fell from $234.72 million at December 31, 2022 to $49.36 million at June 30, 2023.
• Operating cash flow was $67,155 for the first half, compared with cash used of $364,764 in the prior-year period. Cash outside the trust decreased by $6,282 to $41,844.

Outlook, risks and unusual items

• Management disclosed substantial doubt about the company’s ability to continue as a going concern, citing the cash position, working-capital deficit, and mandatory liquidation if no business combination is completed by October 22, 2023. Sponsor working-capital support is possible but not committed. Management believes liquidity or borrowing capacity may suffice through a combination closing or one year from filing, but cautions liquidity may be inadequate.
• Failure to close by the deadline, absent an extension, would require liquidation and redemption of public shares. The filing states that no liquidation-related adjustments have been made to the financial statements.
• Redemptions, additional financing, or share issuance for a transaction could reduce cash available or dilute existing holders. A possible U.S. 1% stock-repurchase excise tax could also reduce funds available, depending on transaction structure and applicable guidance.
• Disclosure controls were deemed ineffective due to a material weakness in financial-statement review. Management described planned remediation, including enhanced review procedures and communication with service providers, but gave no assurance these measures will be effective.
• The filing reports no legal proceedings and no material change to the risk factors in the prior Form 10-K. No company-specific revenue or earnings guidance is provided.

Investor verification points

1. Confirm the filing entity and transaction status: this is WWAC’s SPAC 10-Q, not standalone Aeries Technology financial reporting; verify the proposed AARK/Aeries combination’s closing conditions and timeline.
2. Verify the October 22, 2023 business-combination deadline, any subsequent extension or closing, and the treatment of remaining public shares and trust funds.
3. Check the sources and uses of transaction financing, including the conditional $5.0 million PIPE, expected redemptions, and any additional funding required.
4. Assess the going-concern disclosure, sponsor-note balances and availability of further sponsor support, which is not committed.
5. Review remediation of the disclosed material weakness and whether subsequent filings report corrected or additional financial-statement issues.