Business context and reporting period
The supplied filing is SportsMap Tech Acquisition Corp.’s unaudited Form 10-Q for the quarter and six months ended June 30, 2023, signed August 21, 2023. This differs from the request metadata naming Multisensor AI Holdings, Inc. SportsMap was a blank-check company with no operating business or revenue; it was pursuing a business combination with Infrared Cameras Holdings, Inc. (ICI).
Financial results and position
| Metric | Three months ended June 30 | Six months ended June 30 |
|---|---|---|
| Revenue | None | None |
| Operating costs | $432,334 (2022: $314,387) | $952,519 (2022: $541,562) |
| Net loss | $959,222 (2022: $130,227) | $454,030 (2022: $317,120) |
| Net loss per share | $0.08 (2022: $0.01) | $0.04 (2022: $0.02) |
- Interest earned on Trust Account investments was $481,538 for the quarter and $1,765,580 for the six months. Q2 also included a $911,167 accrued-interest expense on promissory notes.
- At June 30, cash outside the Trust Account was $255,452; Trust Account investments were $17.24 million; total assets were $17.53 million and total liabilities were $1.72 million. Redeemable shares were recorded as temporary equity at $17.14 million. Stockholders’ equity was in deficit by $1.33 million.
- Working capital deficit was $1.33 million, excluding taxes payable from the Trust Account. Promissory Notes payable were $276,495. The filing reports no long-term debt or lease obligations.
- Six-month operating cash outflow was $1.32 million. Cash at period-end was $255,452, versus $534,389 at June 30, 2022. Financing included $981,460 in Promissory Note proceeds; redemptions removed $102.90 million from the Trust Account and were offset by corresponding redemption payments.
- No meaningful operating margin is available because the company had no operating revenue.
Material changes and transaction developments
- In April 2023, stockholders approved monthly extensions to the business-combination deadline, potentially through December 20, 2023, subject to funding the Trust Account by $0.05 per remaining public share for each extension. By June 30, SportsMap had deposited $245,242 to extend the deadline to August 20. A further $81,747 deposit on July 14 extended it to September 20, 2023.
- In connection with the extension vote, 9,865,056 public shares were redeemed for $102.90 million, leaving 1,634,944 public shares. SportsMap recorded a $1,028,975 excise-tax liability related to the redemptions.
- The December 2022 agreement to combine with ICI was amended June 27, 2023. The filing expected closing in late Q3 or early Q4 2023, subject to stockholder approval and other conditions. Either party may terminate if the transaction is not completed by December 20, 2023, subject to the agreement’s terms.
- ICI’s stated equity value starts at $100 million, adjusted for its debt, cash, participating option exercise proceeds, and qualifying convertible notes. Up to 2.4 million earnout shares are tied to a $12.50 share-price/transaction-value condition or $68.5 million of 2024 revenue, subject to agreement terms.
Outlook, risks and unusual items
- Management stated that the $255,452 of cash outside the Trust Account might not fund operations for 12 months without a business combination. The filing identifies substantial doubt about the company’s ability to continue as a going concern; if the transaction is not completed by the applicable deadline, liquidation and dissolution are required. Additional financing from the Sponsor or others is not committed.
- The notes describe the 2023 Promissory Notes as non-interest-bearing, while the income statement records $911,167 of accrued interest expense and the balance sheet reports $276,495 payable. The filing also describes founder shares transferred to note investors as an incentive and records a fair-value-related discount. These accounting and contractual amounts merit review.
- Contingent transaction fees include a $4.025 million cash fee to Roth Capital upon closing, potential Craig-Hallum cash and stock advisory fees, and additional legal fees payable to the extent specified if the transaction closes. The filing does not record these contingent fees as liabilities at June 30.
- Management reported disclosure controls were not effective because of material weaknesses involving inadequate financial-statement review and controls over prepaid expenses, promissory notes, accounts payable and accrued expenses. Remediation was planned but not assured.
- Management said COVID-19 and the Russia-Ukraine war could adversely affect the company or its target search, but the impact was not determinable. It reported no material inflation impact and no legal proceedings.
Important facts for investors to verify
- Confirm the filing’s issuer: the document is for SportsMap Tech Acquisition Corp., not the company named in the request metadata.
- Check the subsequent status and conditions of the SportsMap–ICI transaction, current deadline, required approvals, and any further extensions or funding.
- Reconcile Promissory Note principal, discount, founder-share transfers and the $911,167 accrued-interest charge, including the amount and terms of any remaining obligations.
- Assess available operating cash, financing commitments, liquidation risk, redemption levels and the potential effect of the excise tax on transaction or liquidation proceeds.
- Review transaction-related cash and stock fees, potential earnout dilution, and progress in remediating the disclosed material weaknesses.