Filing summary
Important entity distinction: This is Fifth Wall Acquisition Corp. III’s Form 10-Q, not Mobile Infrastructure Corp.’s standalone quarterly report. It covers the quarter and six months ended June 30, 2023; Fifth Wall was a SPAC pursuing a merger with Mobile Infrastructure Corp. (MIC). Amounts below are U.S. dollars.
Business context and reporting period
Fifth Wall had not begun operating and reported no operating revenue. Its activity was pursuing a business combination. The proposed MIC merger was announced in December 2022 and amended in March 2023. Shareholders approved an extension of the SPAC’s deadline from May 27 to September 15, 2023. After quarter-end, Fifth Wall shareholders approved the merger on August 10, 2023; the filing does not establish that the merger had closed by the reporting date.
Financial results and liquidity
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| 2023 net income | $1.614 million | $3.114 million |
| 2022 net income (loss) | $(239,000) | $(592,000) |
| 2023 general and administrative expense | $1.136 million; related party $52,500 | $2.381 million; related party $105,000 |
| 2023 Trust Account investment income | $2.803 million | $5.600 million |
| 2023 earnings per share, Class A and B | $0.08 each | $0.11 each |
- Net income was driven by Trust Account investment income, not operating revenue. General and administrative expenses increased substantially versus 2022.
- At June 30, cash was $54,872, current assets $141,570, current liabilities $3.729 million, and working capital deficit approximately $3.6 million. Total liabilities were $3.729 million; no working-capital loans were outstanding.
- Trust Account investments were $4.769 million, down from $277.949 million at year-end 2022. The cash flow statement reports $278.781 million withdrawn from the Trust Account in connection with redemptions, with an equal amount reported as redemption financing outflow. Cash used in operating activities was $387,802; ending cash was $54,872.
- Of 27.5 million public Class A shares subject to possible redemption at year-end, 441,302 remained at June 30. The filing reports redemption value of $10.81 per share at June 30.
- No operating margin is applicable because the SPAC had no operating revenue. The filing reports no outstanding debt or other borrowing at quarter-end.
Material changes, outlook and risks
- Management concluded that the low operating cash and working-capital deficit, together with the liquidation deadline, raised substantial doubt about the company’s ability to continue as a going concern. Its plan was to complete the MIC business combination before the extended September 15, 2023 deadline.
- The original $1.2 million-share common-stock PIPE agreement was terminated in June. New agreements provided for a proposed $46 million private placement of Series 2 convertible preferred stock, subject to closing conditions; the filing does not report those proceeds as received.
- The sponsor agreed to cancel 4.775 million founder shares under the amended sponsor agreement; additional founder shares could vest only if specified post-merger share-price thresholds were met.
- Deferred underwriting commissions were eliminated after underwriter waivers; none remained payable at June 30.
- Disclosure controls were assessed as ineffective due to a material weakness in accounting for extinguishment of a significant contingent obligation. The weakness had led to restatements of 2022 interim financial statements; management described additional review and remediation efforts.
- Nasdaq had notified the company of a deficiency in the minimum public-holder requirement. Nasdaq had granted until August 14, 2023 to regain compliance. The filing also reports an August 4 announcement of an intended Nasdaq delisting and NYSE American listing for the post-merger company.
- The filing lists no legal proceedings and no material changes to previously disclosed risk factors. It identifies general market and geopolitical uncertainty as risks to completing a business combination.
- Disclosure point to check: The cash flow statement reports Trust Account withdrawals for redemptions, while Note 8 says no money was withdrawn from the Trust. Investors should reconcile this apparent inconsistency against the full filing and related filings.
Important facts for investors to verify
- Whether and when the MIC merger closed, and the final terms and financing actually completed, including the proposed $46 million preferred-stock investment.
- Final public-share redemptions, remaining Trust Account funds, and the company’s ability to meet transaction costs and deadline requirements.
- Resolution of the Nasdaq public-holder deficiency and the post-merger exchange listing.
- Remediation of the accounting-control material weakness and any further corrections to previously reported financial statements.
- The Trust Account withdrawal disclosure inconsistency and the final treatment of sponsor founder shares and other dilution.