Multisensor AI Holdings, Inc. quarterly report, Q1 FY2023

Business context and reporting period

This is SportsMap Tech Acquisition Corp.’s unaudited Form 10-Q for the three months ended March 31, 2023. Although the request identifies Multisensor AI Holdings, Inc., the supplied filing is for SportsMap, a blank-check company; it does not report Multisensor AI’s operating results.

SportsMap had not commenced operations and had no operating revenue. It had agreed to combine with Infrared Cameras Holdings, Inc. (ICI); management expected the transaction to close in the third quarter of 2023, subject to stockholder approval and other conditions.

Financial results and position

MetricQ1 2023Q1 2022 / comparison
Operating costs$520,185$227,175; increased $293,010
Trust investment interest income$1,284,042$40,282
Net income (loss)$505,192$(186,893)
Net income (loss) per share$0.03$(0.01)
Net cash used in operating activities$(347,671)$(251,202)
  • At March 31, 2023, cash outside the trust was $13,981, current assets were $43,018, and working capital deficit was $343,046 excluding taxes. Trust assets were $119.9 million; total assets were $119.9 million.
  • Total liabilities were $850,440. The filing reported no long-term debt obligations and no working-capital loans outstanding at quarter-end. Stockholders’ equity was a deficit of $347,497; $119.4 million of redeemable shares was presented as temporary equity.
  • The trust balance increased from $118.7 million at December 31, 2022, primarily reflecting investment income, despite a $139,386 withdrawal to pay taxes. The company’s ordinary cash fell from $222,266 to $13,981.
  • Margins are not meaningful because the company had no operating revenue. Its reported profit resulted from trust interest exceeding operating costs and income tax expense.

Material developments, outlook and risks

  • Operating costs more than doubled year over year, while trust interest rose substantially; the company moved from a net loss to net income.
  • Management stated that $13,981 outside the trust might not fund operations for 12 months and disclosed substantial doubt about the company’s ability to continue as a going concern. Sponsor and other potential lenders were not obligated to provide additional funds.
  • The company’s business-combination deadline was extended after quarter-end. On April 14, 2023, stockholders approved monthly extensions, potentially through December 20, 2023; SportsMap deposited $81,747 to extend the deadline through May 20, 2023. The filing also describes the pre-extension May 20 deadline and a separate business-combination agreement termination date of June 30, 2023, subject to a possible extension.
  • In connection with the extension, 9,865,056 shares were redeemed; 5,184,944 shares remained outstanding, including 1,634,944 public shares, and approximately $17 million remained in trust. These are subsequent-event figures, not March 31 balances.
  • After quarter-end, lenders agreed to provide up to $680,000 in unsecured, non-interest-bearing loans, with repayment due at the earlier of a business-combination closing and subject to an extension option. Lenders were to receive founder shares. The company also reported approximately $320,000 of additional funding secured, with terms expected to be similar.
  • The ICI transaction’s consideration is based on an adjusted equity value starting at $100 million, subject to specified adjustments. Up to 2.4 million earnout shares may be issued if the combined company meets stated share-price or 2024 revenue conditions, including $68.5 million of revenue for that year.
  • Potential transaction-related fees include a $4.025 million Roth Capital cash fee upon closing, additional contingent advisory fees, and legal fees. The filing warns that a potential 1% federal excise tax on stock repurchases could reduce cash available for a transaction or liquidation. COVID-19 and the Russia-Ukraine war were also cited as possible, unquantified risks.

Important facts for investors to verify

  • Confirm the intended issuer: this filing is for SportsMap Tech Acquisition Corp., not Multisensor AI Holdings, Inc.
  • Check the latest status, approvals, deadlines and financing for the proposed SportsMap–ICI transaction, including whether it closed or was terminated.
  • Verify current public shares and trust funds after the reported redemptions, and the amount available for a transaction after taxes and fees.
  • Assess funding sufficiency and going-concern risk, including whether post-quarter lender commitments were funded and any additional financing obligations.
  • Review the contingent transaction fees, earnout conditions and possible excise-tax exposure for their effect on transaction value and cash proceeds.