Business context and reporting period
The supplied filing is Chavant Capital Acquisition Corp.’s unaudited Form 10-Q for the three months ended March 31, 2022, filed May 16, 2022. It is a Cayman Islands SPAC seeking a business combination, not an operating business. The request metadata names MOBIX LABS, INC., which does not match the registrant identified in the filing.
Financial results and liquidity
- Revenue: No operating revenue; the company had not commenced operations and expects revenue only after a business combination.
- Net income: $604,359, versus a $1,782 net loss from inception through March 31, 2021. Q1 2022 income included a $987,262 noncash gain from the decrease in warrant liabilities and $1,973 of interest income, offset by $384,876 of operating expenses. The filing reports basic and diluted earnings per share of $0.06.
- Cash flow: $121,584 used in operating activities. Cash outside the trust fell to $119,122 from $240,706 at December 31, 2021.
- Assets and liquidity: Total assets were $80.36 million, including $80.00 million held in trust, primarily in U.S. Treasury investments. Working-capital deficit was $460,581, compared with $1,062,967 at year-end.
- Liabilities and debt: Total liabilities were $817,726, including a $680,000 warrant liability and $137,726 of accrued expenses. No working-capital loans were outstanding; the company reported no long-term debt.
Changes versus prior periods
Compared with December 31, 2021, cash outside trust declined by $121,584, while the warrant liability fell from $1,667,262 to $680,000, producing the quarter’s principal source of reported income. The working-capital deficit narrowed. The filing’s 2021 income-statement comparator covers only the period from inception through March 31, 2021, when the company had no shares outstanding, so it is not a comparable full quarter.
Outlook, risks and unusual items
- Management said cash outside the trust would not support operations for at least 12 months absent a business combination. The filing states this raises substantial doubt about the company’s ability to continue as a going concern; management planned to address this by completing a business combination, but gave no assurance of success.
- The SPAC’s 12-month combination period runs from the July 22, 2021 IPO closing. If it fails to complete a business combination within that period, it must wind up and redeem public shares; warrants may expire worthless. Management said it intended to close a combination before the mandatory liquidation date.
- A contingent marketing fee of $2.8 million, equal to 3.5% of IPO gross proceeds, is payable only if a business combination closes. The sponsor may, but is not obligated to, provide working-capital loans.
- Management identified a material weakness in internal control over financial reporting related to earnings-per-share presentation and concluded disclosure controls were ineffective as of March 31, 2022. Remediation was planned, with no assurance it would be effective.
- The filing cites uncertainty from the COVID-19 pandemic and the Russia-Ukraine conflict. It also notes proposed SEC SPAC rules that could increase transaction costs and affect the ability to complete a combination.
Important facts for investors to verify
- Confirm the filing identity: this report is for Chavant Capital Acquisition Corp., not MOBIX LABS, INC.
- Verify business-combination progress and the applicable deadline, including any subsequent extensions or amendments.
- Assess available cash outside trust, expected transaction costs, and whether additional financing is needed.
- Review the going-concern disclosure, the EPS-related material weakness and subsequent remediation updates.
- Confirm potential redemptions, warrant-liability valuation changes, and the contingent $2.8 million marketing fee.