Filing summary
Entity and period: The supplied filing is a Form 10-Q for 8i Acquisition 2 Corp., a blank-check company, for the quarter ended April 30, 2022. It is not a filing by EUDA Health Holdings Ltd. and does not cover 2021 Q3. 8i reported that it was a shell company and had not commenced operations.
Financial results and position
| Metric | Three months ended April 30, 2022 | Nine months ended April 30, 2022 |
|---|---|---|
| Revenue | None | None |
| Formation and operating costs | $481,638 | $752,861 |
| Trust-account dividends | $8,649 | $9,395 |
| Net loss | $472,989 | $743,466 |
As of April 30, 2022, cash was $546,887; trust-account investments were $86,259,395; total assets were $86,944,172; and total current liabilities were $3,879,253. Working capital deficit was $175,726, excluding deferred offering costs and deferred underwriting commissions. Shareholders’ deficit was $2,490,661. The balance sheet included $800,000 in non-interest-bearing promissory notes from CEO James Tan and $3,018,750 of deferred underwriting commissions. No operating margins are meaningful because the company had no revenue.
Operating cash use was $652,888 for the nine-month period. Cash at period end was $546,887. The filing reports no long-term debt obligations; the related-party notes are payable after a business combination and may be converted into private units at the lender’s option.
Changes, transaction and outlook
- Compared with the prior-year periods, reported costs and losses increased as the company completed its IPO and pursued a business combination. Prior-year comparison periods cover the company’s early formation stage and are not directly comparable.
- The November 2021 IPO raised $86.25 million gross; a concurrent private placement raised $2.92 million. The company placed $86.25 million in trust. At April 30, 2022, redeemable shares were presented as $85.56 million of temporary equity.
- On April 11, 2022, 8i entered into a share purchase agreement to acquire all issued and outstanding shares of EUDA Health Limited from Watermark Developments Limited. The board approved the agreement and recommended shareholder approval. The filing says a fairness opinion was anticipated; it does not report its completion or disclose the purchase price in the supplied text.
- CEO and board chair James Tan owns 10% of the seller, a related-party conflict investors should assess. EUDA Health’s current officers and directors were expected to take those roles in the combined company; the sponsor could nominate one independent director.
- 8i had until November 24, 2022, absent sponsor extensions, to complete a business combination. It disclosed substantial doubt about its ability to continue as a going concern if it fails to complete one by the deadline; failure would trigger liquidation and dissolution. The filing describes possible two three-month extensions.
- Management said COVID-19 could adversely affect the company’s financial position, operations or target search, but the impact was not determinable. It provided no operating or transaction-completion guidance.
Other notable disclosures
- The filing says disclosure controls were effective and reports no material change in internal control over financial reporting during the quarter.
- No legal proceedings were reported. The company stated it was not required to provide Item 1A risk-factor disclosures as a smaller reporting company.
- The cover page marks “No” to whether all required Exchange Act reports were filed during the preceding 12 months. Verify the significance and status of any filing delinquency.
Investor verification points
- Confirm the correct issuer and reporting period: this is 8i Acquisition 2 Corp.’s April 30, 2022 10-Q, not an EUDA Health Holdings Ltd. 2021 Q3 report.
- Review the SPA’s consideration, closing conditions, redemption and extension terms, and the status and conclusions of the anticipated fairness opinion.
- Assess the CEO’s 10% interest in the seller, related-party financing and transaction approvals, including protections for public shareholders.
- Verify the business-combination deadline and extensions: the filing references November 24, 2022 in its going-concern discussion and November 23, 2022 in other transaction-related text.
- Check the filing-status response on the cover page and reconcile the cash-flow statement’s presentation, which labels $87,449,775 of financing proceeds as “net cash provided by investing activities.”