Filing summary
Registrant and period: The supplied filing is a Form 10-Q for the quarter ended June 30, 2021, filed by CF Acquisition Corp. VIII—not XBP Global Holdings, Inc. It describes a newly formed SPAC seeking a business combination, not an operating business. The mismatch with the requested company name should be verified.
Financial results and position
- Revenue and operations: No operating revenue or operations; the company reported formation, IPO, and target-search activity. Margins are not meaningful.
- Net result: Q2 net income was $437,711; the six-month net loss was $1.385 million. Results were driven by noncash fair-value changes: a $1.092 million Q2 warrant-liability gain and a $245,264 loss on forward-purchase securities liability; for six months, a $1.230 million warrant gain was outweighed by a $2.103 million forward-purchase liability loss. Six-month general and administrative costs were $401,709, related-party administrative expense $35,187, and franchise tax expense $80,500.
- Cash flow: For the six months, operating cash flow was zero, investing cash flow was negative $250 million (trust funding), and financing cash flow was positive $250.041 million. Ending operating cash was $66,065.
- Liquidity and balance sheet: At June 30, total assets were $251.358 million, including $250.005 million in the trust account. Total liabilities were $10.535 million, including $7.087 million in warrant liabilities and $2.103 million in forward-purchase securities liability. Working capital was negative $547,513; stockholders’ equity was $5.000 million. Class A shares subject to possible redemption were recorded as $235.824 million of temporary equity.
- Debt and related parties: Sponsor-loan borrowings were approximately $617,500, against a committed facility of up to $1.75 million. The company also owed related parties approximately $597,000 for expenses paid on its behalf. No other conventional debt is identified in the supplied text.
Changes and context
The SPAC completed its IPO on March 16, 2021, raising $250 million gross, and sold $5.4 million of private-placement units. Consequently, the filing compares June 30, 2021 balances with December 31, 2020, before the IPO; it does not provide a prior-year operating period for meaningful year-over-year comparison. Operating cash increased from $25,000 at year-end to $66,065. Six-month results include the new fair-value liabilities and IPO-related activity.
Outlook, risks, and unusual items
- The company had until March 16, 2022 to complete a business combination, unless stockholders approved an extension. If unsuccessful, it would liquidate and redeem public shares from the trust, while warrants could expire worthless.
- Management expected available working capital and sponsor borrowing capacity to meet needs through the earlier of a business combination or one year from the filing. However, the filing states that the liquidation deadline raises substantial doubt about the company’s ability to continue as a going concern.
- A $9.35 million marketing fee to Cantor Fitzgerald & Co., an affiliate of the sponsor, is payable upon consummation of a business combination. The sponsor also committed to a forward purchase of $10 million of units, plus 250,000 shares, at the transaction closing; its liability valuation depends in part on estimated transaction-completion probability.
- Management said COVID-19 could affect the company’s financial position or target search, but the impact was not determinable. The filing reports no material changes to previously disclosed risk factors and no legal proceedings.
- Disclosure controls were deemed ineffective because of a material weakness concerning accounting for warrants and forward-purchase securities. Remediation steps were underway but not yet fully evidenced; management believed the weakness could be remediated during 2021.
Important facts to verify
- Confirm that this CF Acquisition Corp. VIII filing—not an XBP Global Holdings, Inc. filing—is the intended document.
- Verify the March 16, 2022 combination deadline, any extension, and the status of any proposed transaction.
- Assess the $547,513 working-capital deficit, sponsor-loan availability and terms, and related-party balances.
- Review the $9.35 million transaction fee, forward-purchase commitment, and fair-value assumptions underlying reported earnings.
- Check subsequent remediation and testing of the material weakness in disclosure controls.