Filing summary
Entity mismatch: The supplied filing is CF Acquisition Corp. VIII’s unaudited Form 10-Q for the quarter ended March 31, 2022, not a filing by XBP Global Holdings, Inc. The filing describes a SPAC that had not begun operating; it does not report XBP’s operating results.
Business context and reporting period
CF Acquisition Corp. VIII was a blank-check company seeking a business combination, with a stated focus on financial services, healthcare, real estate services, technology and software. It had no operations or operating revenue through March 31, 2022. The financial statements compare the three months ended March 31, 2022 and 2021 and are unaudited.
Key financial metrics
| Metric | Q1 2022 | Q1 2021 or prior date |
|---|---|---|
| Net income (loss) | $3.41 million | $(1.82) million |
| Operating loss | $(414,000) | $(103,000) |
| Operating revenue | None | None |
| Operating cash flow | $0 | $0 |
| Cash outside trust | $25,000 | $25,000 at Dec. 31, 2021 |
| Trust account | $225.62 million | $250.02 million at Dec. 31, 2021 |
| Working capital deficit | Approximately $6.82 million | Approximately $2.63 million at Dec. 31, 2021 |
| Loans payable to Sponsor | Approximately $5.45 million | Approximately $734,000 at Dec. 31, 2021 |
| Total liabilities | $10.95 million | $10.16 million at Dec. 31, 2021 |
Q1 2022 net income was primarily non-operating: it included a $3.19 million gain from the change in fair value of warrant liabilities, $579,000 of other income, a $47,000 gain on the forward purchase securities liability, and approximately $6,000 of trust interest. The warrant and forward purchase liability fair-value gains are valuation changes, not operating performance. No meaningful operating margin is applicable because the company had no revenue.
Material changes and notable events
- At a March 8, 2022 stockholder meeting, the company extended its business-combination deadline from March 16 to September 30, 2022. In connection with the extension, 2,879,927 public shares were redeemed for $28.80 million, and the Sponsor loaned approximately $4.42 million for deposit into the trust account.
- The trust account balance declined from $250.02 million to $225.62 million, reflecting redemptions and other trust-account activity. Redeemable public shares fell from 25.0 million to 22.12 million.
- The company’s Q1 2022 net income improved from the prior-year loss, mainly because of the change in fair value of warrant liabilities and other income. General and administrative costs increased to $371,000 from $78,000.
- Reported investing cash inflows and financing cash outflows offset, leaving operating cash at $25,000. The filing reports no operating cash flow in either comparative quarter.
Outlook, risks and contingencies
- Management said Sponsor borrowing capacity and working capital were expected to be sufficient through the earlier of a business combination or one year from the filing. This depends on Sponsor support; certain additional loans are discretionary, not committed.
- The company disclosed substantial doubt about its ability to continue as a going concern if it does not complete a business combination by September 30, 2022. If unsuccessful, it must cease operations, redeem public shares under the stated terms and liquidate; warrants could expire worthless.
- A $9.35 million marketing fee to Cantor Fitzgerald & Co., an affiliate of the Sponsor, is payable upon completion of a business combination. The Sponsor also committed up to $1.75 million under the Sponsor Loan; approximately $1.03 million was outstanding at quarter-end.
- Management identified potential effects from COVID-19, the war in Ukraine, financial-market volatility, inflation, interest rates and supply-chain disruptions, but said specific impacts were not readily determinable.
- Disclosure controls were assessed as ineffective due to a material weakness in controls over accounting for complex financial instruments. Management described remediation steps but gave no assurance they would be effective.
- The company reported no legal proceedings and no material changes to previously disclosed risk factors, while noting proposed SEC SPAC rules could increase the cost and time required to complete a combination.
Important facts for investors to verify
- Confirm the intended issuer: this is a CF Acquisition Corp. VIII filing, not an XBP Global Holdings, Inc. filing.
- Review the composition and nature of the reported $579,000 of other income and whether it is recurring; the filing text does not provide a clear breakdown.
- Reconcile the Extension Loan amount: the filing cites both $4,424,015 and $4,424,105 in different passages.
- Assess the September 30, 2022 business-combination deadline, redemption terms, and the consequences for public shares and warrants if no transaction closes.
- Evaluate the company’s reliance on Sponsor financing, its working-capital deficit, and the disclosed going-concern doubt.
- Monitor remediation of the material weakness in financial-instrument accounting and the company’s subsequent control-effectiveness disclosures.