Filing summary
Registrant clarification: Despite the request metadata naming MOBIX LABS, INC., this filing is for Chavant Capital Acquisition Corp., a Cayman Islands SPAC and shell company. It is not a Mobix Labs operating-company filing.
Business context and reporting period
The unaudited Form 10-Q covers the quarter ended September 30, 2021, and reports results from Chavant’s March 19, 2021 inception through September 30, 2021. Chavant had not begun operations or generated operating revenue; its activities were formation, its July 2021 IPO, and searching for a business combination target.
Financial highlights
| Metric | Three months ended September 30, 2021 | Inception through September 30, 2021 |
|---|---|---|
| Revenue | None | None |
| Operating expenses | $362,248 | $410,235 |
| Net income | $794,541 | $746,554 |
| Operating cash flow | Not separately presented for the quarter; inception-to-date cash used was $1,037,395 |
Quarterly net income primarily reflected a $1.156 million noncash gain from a decrease in the fair value of private-placement warrant liabilities, plus $789 of interest income, offset by operating expenses. Accordingly, reported income does not reflect operating profitability. Margins are not meaningful because there was no revenue.
- September 30 balance sheet: Cash was $329,356; prepaid expenses were $627,160; and trust-account investments were $80,000,789. Total assets were $80,957,305.
- Liabilities and equity: Warrant liabilities were $1,632,000. The 8 million redeemable public shares were classified as temporary equity at $80 million. Shareholders’ deficit was $674,695. No working-capital loans were outstanding.
- Cash flows, inception to date: $80 million was placed in the trust account; financing activities provided $81,366,751; and cash ended at $329,356.
- Debt and liquidity: No long-term debt was reported. Management said it believed working capital and potential borrowing capacity would be sufficient through a business combination or one year from the filing, but sponsor loans are optional, not committed.
Changes, outlook, and risks
No prior-year comparable operating period exists because the company was formed in 2021. The IPO raised $80 million from 8 million units, and a concurrent private placement raised $3.4 million. The underwriters’ over-allotment option expired unexercised, and 300,000 founder shares were forfeited. Chavant reported an immaterial error in its previously filed July 22, 2021 balance sheet—approximately $778,000 understatement of assets and shareholders’ equity—and said the quarter-end statements reflect the correction.
Chavant provided no revenue or earnings guidance. Its stated objective was to complete a business combination within 12 months after the July 22, 2021 IPO closing. If it fails, public shares are to be redeemed from the trust, subject to stated deductions and legal requirements; warrants would expire worthless. The company must identify a target meeting its stated minimum fair-market-value and control requirements. A deferred marketing fee equal to 3.5% of IPO gross proceeds is payable only if a business combination closes. COVID-19 could adversely affect the company or its target search, but management said the impact was not readily determinable. Management reported effective disclosure controls and no material change in internal control over financial reporting.
Important facts for investors to verify
- Confirm the issuer: this is Chavant Capital Acquisition Corp., not Mobix Labs, Inc.
- Assess how the search timeline, redemption rights, and trust-account terms affect the likelihood and economics of a business combination.
- Distinguish the noncash warrant remeasurement gain from recurring operating performance; the company reported no operating revenue.
- Review available cash outside the trust and whether any sponsor financing is actually committed.
- Review the corrected July balance-sheet figures and the contingent marketing fee and other transaction costs due upon a completed combination.