Filing summary
Registrant clarification: This fiscal 2022 Form 10-K is filed by CF Acquisition Corp. VIII, a SPAC pursuing a merger with XBP Europe. It is not an operating-company 10-K for XBP Global Holdings, Inc.; the filing does not provide XBP Europe’s operating results.
Business context and reporting period
The report covers the year ended December 31, 2022 and was signed March 29, 2023. CF Acquisition Corp. VIII had no operating business or revenue; its activity was formation, fundraising and seeking a business combination. It entered into a merger agreement with XBP Europe on October 9, 2022. The proposed transaction would make XBP Europe a wholly owned subsidiary, subject to stockholder approval, regulatory approvals and other closing conditions.
Financial results and liquidity
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | None | None |
| Net income (loss) | $2.394 million | ($1.708 million) |
| Operating loss | ($2.884 million) | ($2.736 million) |
| Trust-account interest income | $1.240 million | $18,000 |
| Operating cash flow | $0 | $0 |
The 2022 net income was not generated by operations: it included a $5.121 million gain from the change in warrant liability fair value, partly offset by a $498,000 loss on the forward-purchase securities liability. No operating margins are meaningful because the SPAC had no revenue.
- At year-end, cash outside the trust was $41,154; trust assets were $31.446 million, down from $250.018 million a year earlier.
- Current assets were $251,000 against current liabilities of $9.460 million; working capital deficit was approximately $9.209 million, versus $2.634 million in 2021.
- Sponsor loans had a carrying amount of approximately $8.200 million and face amount of approximately $8.500 million at year-end, versus $734,000 in 2021. The filing says outstanding loans are expected to convert into Class A shares at $10 per share upon the proposed merger, subject to its terms.
- There were 2,960,098 redeemable public shares at year-end, carried at $10.53 per share. Redemptions at the 2022 extension votes reduced the trust by approximately $224.9 million in total.
Material changes, outlook and risks
- The company’s net result shifted from a 2021 loss to 2022 income, largely due to non-cash fair-value changes and higher trust interest, not a change in operating performance.
- The XBP Europe merger consideration is based on $220 million less XBP Europe closing indebtedness, divided by $10 per share, plus 1,330,650 shares. The sponsor agreed to forfeit 733,400 founder shares and waive its anti-dilution rights in connection with the deal. The sponsor also agreed to waive the $9.35 million marketing fee for this transaction.
- After year-end, stockholders approved an extension to September 16, 2023. A further 1,523,509 public shares were redeemed in connection with that extension, and the sponsor agreed to provide up to $344,781 in extension loans. The company stated that failure to complete a business combination by the deadline would result in liquidation; warrants would expire worthless.
- Management believed sponsor borrowing capacity and working capital would cover needs through the earlier of a business combination or one year from the filing. Nevertheless, management and the auditor reported substantial doubt about the company’s ability to continue as a going concern because of the deadline and liquidity needs. The audited financial statements received an unmodified opinion with a going-concern emphasis.
- On March 16, 2023, the company moved trust funds from government securities and money-market funds to an interest-bearing demand deposit account. It warned that this could reduce interest earned; the filing also notes that bank deposits may exceed FDIC insurance limits.
- Other notable risks include heavy redemptions, possible financing needs, third-party claims against trust assets, conflicts of interest involving Cantor-affiliated parties, and potential dilution. A possible 1% federal excise tax on certain post-2022 redemptions was also disclosed.
Investor facts to verify
- Confirm the correct issuer and obtain XBP Europe’s separate financial statements and current operating outlook; this 10-K reports SPAC results, not XBP Europe’s.
- Check whether the merger closed by the September 16, 2023 deadline, and review subsequent filings for final terms, approvals, redemptions and financing.
- Verify the trust balance and public shares remaining after the March 2023 extension redemptions, and the resulting cash available at closing.
- Review the sponsor-loan conversion, founder-share forfeiture, transaction dilution and any additional capital required under the final merger terms.
- Assess the going-concern warning, trust-account bank exposure, creditor-claim protections and the potential effect of redemption-related taxes.