BCSAU Blockchain Coinvestors Acquisition Corporation I

Notwithstanding the foregoing, the Memorandum and Articles of Association provide that a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A ordinary shares originally sold in the Initial Public Offering, without the prior consent of the Company.

The Company’s Sponsor, officers and directors (the “initial shareholders”) have agreed not to propose an amendment to the Memorandum and Articles of Association (A) that would modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination within the time period set forth in its Amended and Restated Memorandum and Articles of Association, as may be amended from time to time or (B) with respect to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the Public Shareholders with the opportunity to redeem their Class A ordinary shares in conjunction with any such amendment.

The Company initially had 18 months from the closing of the Initial Public Offering to consummate the initial Business Combination, which has since been extended to November 15, 2024 (the “Combination Deadline”). If the Company is unable to complete a Business Combination by the Combination Deadline and the Combination Deadline is not further extended, the Company will (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations, if any (less up to $100,000 of interest to pay dissolution expenses) divided by the number of the then-outstanding Public Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.

The Sponsor and each member of the Company’s management team have entered into an agreement with the Company, pursuant to which they have agreed to (i) waive their redemption rights with respect to the ordinary shares of the Company that they received in connection with the Company’s initial public offering in connection with the completion of a Business Combination; (ii) waive their redemption rights with respect to the ordinary shares that they received in connection with the Company’s initial public offering in connection with a shareholder vote to approve an amendment to the Company’s Memorandum and Articles of Association (A) that would modify the substance or timing of the Company’s obligation to provide holders of the Class A ordinary shares the right to have their shares redeemed in connection with the initial Business Combination or to redeem 100% of the Public Shares if the Company does not complete the initial Business Combination by the Combination Deadline or (B) with respect to any other provision relating to the rights of holders of the Class A ordinary shares; and (iii) waive their rights to liquidating distributions from the Trust Account with respect to their ordinary shares of the Company that they received in connection with the Company’s initial public offering if the Company fails to consummate an initial Business Combination by the Combination Deadline (although they will be entitled to liquidating distributions from the Trust Account with respect to any public shares they hold if the Company fails to complete the initial Business Combination within the prescribed time frame).

Termination of Proposed Business Combination with Qenta

On November 10, 2022, the Company entered into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business Combination Agreement”), by and among the Company, BCSA Merger Sub, Inc., a Delaware corporation (“Qenta Merger Sub”), and Qenta Inc., a Delaware corporation (“Qenta”).

The Business Combination Agreement and the transactions contemplated thereby were approved by the boards of directors of each of the Company and Qenta. The Business Combination Agreement provides for, among other things, the following transactions: (i) the Company would become a Delaware corporation (the “Domestication”) and, in connection with the Domestication, (A) the Company’s name would be changed to “Qenta Inc.” (“New Qenta”) and (B) each outstanding ordinary share of the Company will become one share of common stock of New Qenta (the “New Qenta Common Stock”); and (ii) following the Domestication, Qenta Merger Sub would merge with and into Qenta, with Qenta as the surviving company in the merger and continuing as a wholly-owned subsidiary of New Qenta (the “Merger”).

The Domestication, the Merger and the other transactions contemplated by the Business Combination Agreement are referred to as the “Qenta Business Combination.”

On August 24, 2023, the Company, Qenta Merger Sub, and Qenta entered into an amendment (the “First BCA Amendment”) to the Business Combination agreement, to, among other things, extend the Termination Date (as defined in the Business Combination Agreement) until May 15, 2024. In addition, under the terms of the First BCA Amendment, Qenta agreed to deliver to the Company specified financial statements and other financial information by specified deadlines (the “Financial Information Obligations”), and the Company agreed not to exercise, but did not waive, BCSA’s Financial Statement Termination Right (as defined in the Business Combination Agreement) unless Qenta failed to comply with the Financial Information Obligations. Qenta failed to meet the first specified Financial Information Obligations deadline.

On August 29, 2023, the Company, Qenta Merger Sub, and Qenta entered into a second amendment (the “Second BCA Amendment”) to the Business Combination Agreement to eliminate the exclusive dealing provision applicable to the Company and to limit the exclusive dealing provision applicable to Qenta to transactions involving special purpose acquisition companies and similar “blank check” companies.

On August 24, 2023, the Company, Sponsor and Qenta entered into an amendment (the “Sponsor Letter Amendment”) to the Sponsor Letter Agreement, dated as of November 10, 2022, by and among the Company, the Sponsor and Qenta, pursuant to which the Sponsor agreed, in connection with the completion of a financing transaction between Qenta and financing parties, to transfer and assign, contingent and conditioned upon the closing of the transactions contemplated by the Business Combination Agreement, up to 3,178,000 of the Sponsor’s Class B ordinary shares of the Company (or, if converted, Class A ordinary shares) and 1,322,000 of the Sponsor’s private placement units of the Company to such financing parties or to Qenta in such amounts and proportions as designated by Qenta, provided that all transferees of such shares or units, as applicable, execute and deliver to the Company a lockup agreement in respect of such securities.

In connection with the execution of the Business Combination Agreement, the Company entered into a Confirmation (the “Forward Purchase Agreement”), with Vellar Opportunity Fund SPV LLC—Series 5 (the “FPA Seller”), a client of Cohen & Company Financial Management, LLC (“Cohen”). Entities and funds managed by Cohen own equity interests in the Sponsor. The primary purpose of entering into the Forward Purchase Agreement was to help ensure the aggregate cash proceeds condition in the Business Combination Agreement would be met, increasing the likelihood that the transaction would close. Pursuant to the Forward Purchase Agreement, (a) the FPA Seller could have, but was not obligated to, purchase after the date of the Company’s redemption deadline through a broker in the open market the Company’s Class A ordinary shares, including such shares that holders had elected to redeem pursuant to the Company’s organizational documents in connection with the Qenta Business Combination, other than from the Company or affiliates of the Company, and (b) the FPA Seller agreed to waive any redemption rights in connection with the Qenta Business Combination with respect to such Class A ordinary shares of the Company it purchased in accordance with the Forward Purchase Agreement (the “Subject Shares”). See Note 6 where the Forward Purchase Agreement is more fully described.

On November 8, 2023, the Company delivered to Qenta written notice of its election to terminate the Business Combination Agreement pursuant to the termination provisions in the Business Combination Agreement and abandoned the Qenta Business Combination (“The Qenta Termination”). In conjunction with The Qenta Termination, the Lock-up Agreements, Sponsor Letter Agreement, Transaction Support Agreements and Forward Purchase Agreement were also terminated in accordance with their respective terms.

As a result of the Qenta Termination, the Sponsor of the Company received 50 Shares of Qenta Common Stock (“Qenta Shares”) to reimburse the Sponsor and the Company for costs, expenses and other liabilities incurred in connection with the Business Combination Agreement. The Company has recorded the Fair Value of the Qenta Shares as an investment on its Balance Sheets and a termination fee on its Statements of Operations as of and for the year ended December 31, 2023 in the amount of $4,070,807. There was a change in the fair value of the Investment in Qenta in the amount of $216,545 during the quarter ended June 30, 2024.

On May 9, 2024, the Company held an extraordinary general meeting of shareholders (the “Meeting”). The only proposal voted upon at the Meeting was the proposal to adjourn the Meeting to May 10, 2024 at 11:00 a.m., Eastern Time. The proposal was approved, and the Meeting was adjourned to allow the Company additional time to engage with its shareholders and consider redemption reversals. The Meeting was reconvened on May 10, 2024 and the shareholders approved a proposal to extend the date by which the Company must consummate an initial business combination (the “Extension Proposal”) from May 15, 2024 to November 15, 2024 (the “Extension”). In connection with the Meeting and the Extension Proposal, holders of 211,794 of the Company’s Class A ordinary shares that the Company issued and sold as part of units in its initial public offering had the right to redeem those shares and elected to redeem an aggregate of 533,146 Class A ordinary shares. As a result, approximately $5.96 million (approximately $11.18 per share) was removed from the Trust Account to pay the redemption price for those shares. After the redemptions, 12,900,648 Class A ordinary shares remained outstanding, including 1,322,000 shares underlying the Private Placement Units. Upon payment of the redemption price, approximately $17.6 million remained in the Trust Account.

In connection with the Meeting, the Company and its Sponsor, entered into one or more non-redemption agreements (the “Non-Redemption Agreements”) with unaffiliated investors. Pursuant to the Non-Redemption Agreements, each investor agreed not to redeem some number of Public Shares (the “Non-Redeemed Shares”) in connection with the Meeting, and in exchange for that commitment, the Sponsor agreed to transfer Class A Shares of the Company to that investor upon the Company’s consummation of an initial business combination, so long as the investor held the Non-Redeemed Shares through the Meeting and the Extension was approved. In connection with the Meeting, the Sponsor has agreed to transfer an aggregate of 294,749 Class A ordinary shares to the non-redeeming shareholders party to the Non-Redemption Agreements.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make the comparison of the Company’s unaudited condensed consolidated financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Going Concern, Liquidity and Capital Resources

As of June 30, 2024, the Company had approximately $324,294 in its operating bank account and working capital deficit of approximately $4.2 million, inclusive of convertible note payable – related party of approximately $1.5 million.

The Company’s liquidity needs up to June 30, 2024 have been satisfied through a payment from the Sponsor of $25,000 (see Note 5) for the Founder Shares (as defined in Note 5) to cover certain offering costs and through the loan under an unsecured promissory note from the Sponsor of $131,517 (see Note 5) and the proceeds from the consummation of the Private Placement not held in the Trust Account. The promissory note was paid in full on November 15, 2021. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, initial shareholders, officers, directors or their affiliates may, but are not obligated to, provide the Company Working Capital Loans (see Note 5). On June 15, 2022, the Company issued a promissory note (the “Sponsor Note”) in the principal amount of up to $1,500,000 to the Sponsor, which was amended effective June 2023 to increase the maximum principal amount to $3,000,000 (see Note 5). As of June 30, 2024, the Company has drawn down a total of $2,273,836 and still can borrow up $726,164 on the Sponsor Note.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” the Company has until November 15, 2024 to consummate a Business Combination. The Company does not have adequate liquidity to sustain operations; however, the Company has access to a Working Capital Loan from the Sponsor that management believes will enable the Company to sustain operations until it completes its initial Business Combination. If a Business Combination is not consummated by November 15, 2024, and such deadline to consummate a Business Combination is not further extended, there will be a mandatory liquidation and subsequent dissolution of the Company. Management has determined that the Company’s liquidity issue, mandatory liquidation should a Business Combination not occur by the applicable deadline, and potential subsequent dissolution, raises substantial doubt about the Company’s ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after November 15, 2024. There can be no assurance that the Company will be able to consummate any Business Combination by November 15, 2024.

Risks and Uncertainties

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy is not determinable as of the date of these unaudited condensed consolidated financial statements, and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these unaudited condensed consolidated financial statements.

On May 1, 2023, First Republic Bank became insolvent. Federal regulators seized the assets of the bank and negotiated a sale of its assets to JP Morgan Chase. The Company held deposits with this bank. As a result of the sale of the assets to JP Morgan Chase, the Company’s insured and uninsured deposits are held at JP Morgan Chase. The Company also moved the funds held in trust for the shareholders and invested in federal government securities through Morgan Stanley.

The Linqto Business Combination Agreement

On April 9, 2024 the Company entered into a Business Combination Agreement (the “Linqto Business Combination Agreement”), by and among the Company, BCSA Merger Sub I, Inc., a Delaware corporation (“Merger Sub”), and Linqto, Inc., a Delaware corporation (“Linqto”). Upon signing, Linqto paid the Company a non-refundable cash payment of $1.0 million pursuant to the Linqto Business Combination Agreement.

The Linqto Business Combination Agreement and the transactions contemplated thereby were approved unanimously by the boards of directors of each of BCSA and Linqto.

The Business Combination Agreement provides for, among other things, the following transactions:

The Domestication, the Merger and the other transactions contemplated by the Linqto Business Combination Agreement are referred to as the “Linqto Business Combination.”

The Company expects the Linqto Business Combination to close in the second half of 2024, following receipt of the required approvals by its shareholders and Linqto’s shareholders and the fulfillment of regulatory requirements and the completion of other customary closing conditions.

Business Combination Consideration

In accordance with the terms and subject to the conditions of the Linqto Business Combination Agreement, (i) each outstanding share of common stock of Linqto will be exchanged for a number of New Linqto Shares based on an enterprise value of Linqto of approximately $700 million, subject to certain adjustments, (ii) each outstanding Company Equity Award (as defined in the Linqto Business Combination Agreement) will be converted into a comparable type of equity award in respect of New Linqto, and (iii) each outstanding Company Warrant (as defined in the Linqto Business Combination Agreement) will be converted into a warrant with respect to New Linqto Shares having the same general terms.

Representations and Warranties and Covenants

The Linqto Business Combination Agreement contains representations, warranties and covenants of each of the parties to the agreement that are customary for transactions of this type. The parties have also agreed to take all action as may be necessary or reasonably appropriate such that, as of the effective time of the Linqto Business Combination, the New Linqto board of directors will consist of up to nine directors (as determined by Linqto), which shall be divided into three classes as nearly equal in size as is practicable, with one director appointed by the Company and the remaining directors appointed by Linqto.

Conditions to Each Party’s Obligations

The obligation of the Company and Linqto to consummate the Linqto Business Combination is subject to certain closing conditions, including, but not limited to, (i) the expiration or termination of the applicable waiting period under applicable antitrust law, (ii) the absence of any order, law or other legal restraint prohibiting the consummation of the Domestication or the Merger, (iii) the effectiveness of the Registration Statement on Form S-4 (the “Registration Statement”) registering the New Linqto Shares to be issued in the Merger and the Domestication, (iv) the approvals of the Company’s shareholders, (v) the approval of Linqto’s shareholders, (vi) the approval by Nasdaq of our listing application in connection with the Business Combination, (vii) the consummation of the Domestication, and (viii) the approval by the Financial Industry Regulatory Authority (“FINRA”) of the transactions as necessary, or the expiration of the relevant time periods for FINRA review without FINRA imposing restrictions. The Linqto Business Combination Agreement also contains certain other customary closing conditions.

Termination

Each of the Company and Linqto may terminate the Linqto Business Combination Agreement for any reason.

If the Linqto Business Combination Agreement is validly terminated, none of the parties to the Linqto Business Combination Agreement will have any liability or any further obligation under the Linqto Business Combination Agreement, except in the case of willful breach or fraud (each, as defined in the Linqto Business Combination Agreement) and for customary obligations that survive the termination (such as confidentiality obligations). In the event of any termination of the Linqto Business Combination Agreement, Linqto will pay the Company a termination fee of $5,000,000 no later than 30 days following the termination of the Linqto Business Combination Agreement.

A copy of the Linqto Business Combination Agreement is filed as Exhibit 2.4 to the Company’s Annual Report on Form 10-K, filed with the SEC on April 15, 2024 (the “Annual Report”), and the foregoing description of the Linqto Business Combination Agreement is qualified in its entirety by reference to the full Business Combination Agreement. The Linqto Business Combination Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of the Linqto Business Combination Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants in the Linqto Business Combination Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts.

Sponsor Support Agreement

Concurrently with the execution of the Linqto Business Combination Agreement, the Company, the Sponsor and Linqto entered into the Sponsor Support Agreement (the “Sponsor Support Agreement”), pursuant to which the Sponsor agreed to, among other things, (i) vote in favor of each of the transaction proposals to be voted upon at the meeting of the Company’s shareholders and the meeting of the Company’s warrant holders, including approval of the Linqto Business Combination Agreement and the transactions contemplated thereby (including the Merger); (ii) forfeit to the Company for no consideration, immediately prior to the effective time of the Linqto Business Combination, (x) all Private Placement Units held by Sponsor (including the ordinary shares and warrants underlying the private placement units), and (y) a number of Founder Shares held by the Sponsor such that the Sponsor will hold no more than 4,000,000 New Linqto Shares at the Closing Date, and (iii) if the Company’s total liabilities at the closing of the Linqto Business Combination exceed $12,500,000 at the Closing Date, to pay the amount of that excess.

A copy of the Sponsor Support Agreement is filed as Exhibit 10.14 to the Annual Report, and the foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference to the Full Sponsor Support Agreement.

Transaction Support Agreements

Concurrently with the execution of the Linqto Business Combination Agreement, certain shareholders of Linqto entered into Transaction Support Agreements with the Company (collectively, the “Transaction Support Agreements”), pursuant to which they have agreed to, among other things, support and vote in favor of the Business Combination Agreement (including the Merger).

A copy of the form of Transaction Support Agreement is filed as Exhibit 10.15 to the Annual Report, and the foregoing description of the Transaction Support Agreements is qualified in its entirety by reference to the full Transaction Support Agreement.

New Registration Rights Agreement

Prior to the Closing Date, each of the Company, Sponsor, certain directors and officers of the Company and certain shareholders of Linqto (collectively, the “Holders”) will enter into a registration rights agreement (the “New Registration Rights Agreement”) pursuant to which, among other things, the Company will agree to file a registration statement registering the resale of shares held by the Holders no later than a number of days to be determined by the parties. The Company has also agreed to provide customary “piggyback” registration rights, subject to certain requirements and customary conditions. The New Registration Rights Agreement also provides that the Company will pay certain expenses relating to those registrations and indemnify the Holders against certain liabilities.

A copy of the form of New Registration Rights Agreement is filed as Exhibit 10.16 to the Annual Report, and the foregoing description of the New Registration Rights Agreement is qualified in its entirety by reference to the full New Registration Rights Agreement.

Special Committee

A special committee of independent and disinterested members of our board of directors evaluated and approved the Linqto Business Combination Agreement and the related ancillary documents and recommended approval on behalf of the Company by our board of directors.

Other than as specifically discussed, this Quarterly Report does not assume the closing of the Linqto Business Combination.

Convertible Promissory Notes – Related Party, Fair Value and Par Value

On June 15, 2022, the Company issued a promissory note for a Working Capital Loan, as described above, of $1,500,000 to the Sponsor for the Sponsor to provide additional working capital to the Company on an as-needed basis toward the consummation of a Business Combination. The Sponsor Note was amended effective June 29, 2023 to increase the maximum principal amount to $3,000,000. Proceeds from the Trust Account may only be used to pay off outstanding working capital loans under this promissory note upon the closing of the Business Combination. The Sponsor Note bears no interest and is due and payable upon the earlier to occur of (i) the date on which the Company consummates its initial Business Combination and (ii) the date that the winding up of the Company is effective. At the election of the Sponsor, all or any portion of the Sponsor Note may be converted into units of the Company upon the consummation of an initial Business Combination (the “Conversion Units”), equal to (x) the portion of the principal amount of the Sponsor Note being converted, divided by (y) $10.00. The Conversion Units are identical to the Private Placement Units issued by the Company to the Sponsor in connection with the Company’s Initial Public Offering. As of June 30, 2024 and December 31, 2023, the total principal outstanding was 2,273,836 and the Company still can borrow up to an additional $726,164 under the Sponsor Note.

As of June 30, 2024 and December 31, 2023, the portion of the Sponsor Note carried under the fair value method is described as “Convertible Promissory Note – Related Party, Fair Value” on the accompanying condensed consolidated balance sheets with a balance of $572,416 and $525,824, respectively. The 2022 proceeds from principal on the Convertible Promissory Note – Related Party, Fair Value totaled $512,000 and are fair valued to the amount of $525,824, containing a $13,824 change in value recorded on the statement of operations for the year ended December 31, 2022. There was a change of $4,096 and $46,592 in fair value recorded during the three and six months ended June 30, 2024, respectively. There was no change in fair value recorded during the three and six months ended June 30, 2023, respectively.

During the period ended June 30, 2024, the Company has concluded that the fair value of the conversion feature on 2023 proceeds from principal requires bifurcation under ASC 815 and is considered de minimis. The underlying economics of the transaction are more accurately represented by recording this portion of the convertible debt agreement as a liability at par value given the de minimis value of the embedded conversion feature in this case.

As of June 30, 2024, a portion of the Sponsor Note carried under the bifurcation method is described as “Convertible Promissory Note – Related Party, Par Value” on the accompanying unaudited condensed consolidated balance sheets with a balance of $1,701,420, as of December 31, 2023, the balance was $1,491,420. As of June 30, 2024 proceeds from principal on the Convertible Promissory Note – Related Party, Par Value totaled $1,701,420.

Administrative Services Agreement

Commencing on the date the securities are first listed on Nasdaq, the Company has agreed to pay the Sponsor a total of $15,000 per month for secretarial and administrative support services provided to the Company. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three and six months ended June 30, 2023, the Company incurred expenses of $28,671 and $78,819, respectively, under this agreement. For the three and six months ended June 30, 2024, the Company incurred expenses of $42,725 and $57,725 under this agreement, respectively. As of June 30, 2024 and December 31, 2023, approximately $58,000 and $84,000, respectively, were due for administrative services in connection with such agreement and have been included in the accrued expenses of the accompanying unaudited condensed consolidated balance sheets.

In addition, the Sponsor, executive officers and directors, or their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing due diligence on suitable Business Combinations. The audit committee will review on a quarterly basis all payments that were made by the Company to the Sponsor, executive officers or directors, or their affiliates. Any such payments prior to an initial Business Combination will be made using funds held outside the Trust Account.

Underwriting Agreements and Amendments

The underwriters had a 45-day option from the date of the Initial Public Offering to purchase up to an additional 3,915,000 Units to cover over-allotments, if any. On November 15, 2021, the underwriters partially exercised the over-allotment and the unexercised portion of the over-allotment of 15,000 units was forfeited. The underwriters were paid underwriting commission of $0.20 per unit, or $5,220,000 in the aggregate, upon the closing of the Initial Public Offering. In addition, $11,280,000 in the aggregate, is payable to the underwriters for deferred underwriting commissions. The deferred underwriting commission will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

The Company entered into an amended agreement with one of its underwriters (Cantor Fitzgerald) to reduce the amount of deferred underwriting fees associated with the Qenta Business Combination. Upon the successful completion of the Qenta Business Combination, the $7,896,000 deferred underwriting fee owed to Cantor Fitzgerald would have been reduced to $3,948,000.

In conjunction with the termination of the Business Combination Agreement, the amended agreement with one of its underwriters mentioned above, was terminated in accordance with its terms on November 8, 2023.

Forward Share Purchase Agreement

In connection with the execution of the Business Combination Agreement, the Company entered into the Forward Purchase Agreement. Pursuant to the Forward Purchase Agreement, (a) the FPA Seller could have, but was not obligated to, purchase after the date of the Company’s redemption deadline through a broker in the open market the Company’s Class A ordinary shares, including such shares that holders had elected to redeem pursuant to the Company’s organizational documents in connection with the Qenta Business Combination, other than from the Company or affiliates of the Company, and (b) the FPA Seller agreed to waive any redemption rights in connection with the Qenta Business Combination with respect to such Class A ordinary shares of the Company it purchased in accordance with the Forward Purchase Agreement (the “Subject Shares”). The Number of Shares were to equal the Subject Shares but be no more than 12,000,000 Shares. The FPA Seller agreed to not beneficially own more than 9.9% of the New Qenta Common Stock on a post-combination pro forma basis.

The Forward Purchase Agreement provided that (a) one business day following the closing of the Qenta Business Combination, New Qenta would pay to the FPA Seller, out of the Trust Account, an amount (the “Prepayment Amount”) equal to the Redemption Price per share (the “Initial Price”) multiplied by the aggregate number of Subject Shares, if any (together, the “Number of Shares”), less 10% (the “Shortfall Amount”) on the date of such prepayment. New Qenta would also deliver the FPA Seller an amount equal to the product of 500,000 multiplied by the Redemption Price to repay the FPA Seller for having purchased up to an additional 500,000 Class A ordinary shares of the Company, which would not be included in the Number of Shares or the Terminated Shares (as defined in the Forward Purchase Agreement).

From time to time and on any scheduled trading day after the closing of the Qenta Business Combination, the FPA Seller could have sold Subject Shares or Additional Shares (as defined in the Forward Purchase Agreement) at its absolute discretion in one or more transactions, publicly or privately, and, in connection with such sales, terminate the Forward Purchase Transaction in whole or in part in an amount corresponding to the number of Subject Shares and Additional Shares.

The Forward Purchase Agreement had a tenure of 36 months (“Maturity Date”), after which time New Qenta would be required to purchase from the FPA Seller such number of shares equal to the Maximum Number of Shares (as defined in the Forward Purchase Agreement) less the Terminated Shares (as defined in the Forward Purchase Agreement) for consideration, settled in cash or New Qenta Common Stock, equal to the Maturity Consideration, which is the amount of (a) in the case of cash, the product of the Maximum Number of Shares less the Terminated Shares and $1.75 and (b) in the case of New Qenta Common Stock, such number of New Qenta Common Stock with a value equal to the product of the Maximum Number of Shares less the Terminated Shares and $1.75 divided by the VWAP Price of the Shares for the 30 trading days prior to the Maturity Date. In certain circumstances, the Maturity Date could have been accelerated, as described in the Forward Purchase Agreement.

The Company and Qenta agreed to pay to the FPA Seller a break-up fee equal to the sum of (i) all fees (in an amount not to exceed $75,000), plus (ii) $350,000, if the Company or Qenta were to terminate the Forward Purchase Agreement prior to the FPA Sellers purchasing shares under the agreement, other than because the Qenta Business Combination did not close, or Class A Ordinary Share redemptions were less than 80%.

The primary purpose of entering into the Forward Purchase Agreement was to help ensure the aggregate cash proceeds condition in the Business Combination Agreement would be met, increasing the likelihood that the transaction would close.

In conjunction with the termination of the Business Combination Agreement, the Forward Purchase Agreement was terminated in accordance with its terms on November 8, 2023.

Shareholder Meetings, Extensions, and Redemptions

On February 3, 2023, the Company held an extraordinary general meeting (the “Shareholder Meeting”) at which the Company’s shareholders approved a proposal to amend the Company’s Memorandum and Articles (the “Memorandum and Articles of Association”) to extend the date by which it has to consummate a business combination from May 15, 2023 to November 15, 2023 (the “Extension Amendment Proposal”). The Extension Amendment Proposal is described in more detail in the Company’s definitive proxy statement filed with the U.S. Securities and Exchange Commission on December 29, 2022.

In connection with the vote to approve the Extension Amendment Proposal, holders of 26,406,729 Class A ordinary shares of the Company exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account. approximately $274.2 million. As a result, approximately $274.2 million (approximately $10.95 per share) was removed from the Trust Account to pay the redemption price for those shares. After the redemptions, 4,915,271 Class A ordinary shares remained outstanding, including 1,322,000 shares underlying the Private Placement Units. Upon payment of the redemption price, approximately $37.3 million remained in the Trust Account.

On October 27, 2023, the Company held an extraordinary general meeting in lieu of the 2023 annual general meeting of shareholders (the “Second Shareholder Meeting”) at which the Company shareholders approved proposals to amend the Memorandum and Articles to (i) extend the date by which BCSA must consummate a business combination from November 15, 2023 to May 15, 2024 or such earlier date as may be determined by the Company’s board of directors in its sole discretion (the “Second Extension Amendment Proposal”), (ii) eliminate the limitation that the Company may not redeem its Class A ordinary shares in an amount that would cause the Company’s net tangible assets to be less than $5,000,001 either immediately prior to or upon consummation of a business combination (the “Redemption Limitation Amendment Proposal”), and (iii) permit for the issuance of Class A Ordinary Shares to holders of the Company’s Class B ordinary shares (“Founder Shares”) upon the exercise of the right of a holder of BCSA’s Founder Shares to convert such holder’s Founder Shares into Class A Ordinary Shares on a one-for-one basis at any time and from time to time prior to the closing of an initial business combination at the election of the holder (the “Founder Share Amendment Proposal,” and together with the Second Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, the “Articles Amendment Proposals”). The Articles Amendment Proposals are described in more detail in BCSA’s definitive proxy statement filed with the U.S. Securities and Exchange Commission on September 5, 2023.

In connection with the approval of the Founder Share Amendment Proposal, the Sponsor voluntarily elected to convert all 9,850,000 of its Founder Shares to Class A Ordinary Shares, and the independent directors of BCSA voluntarily elected to convert all 150,000 of their Founder Shares to Class A Ordinary Shares, in each case, on a one-for-one basis in accordance with the Memorandum and Articles of Association (such conversions collectively, the “Founder Share Conversion”). The Sponsor and the independent directors waived any right to receive funds from the Trust Account established by the Company in connection with its initial public offering with respect to the Class A Ordinary Shares received upon such conversion and no additional amounts were deposited into the Trust Account in respect of any of those Class A Ordinary Shares.

In connection with the vote to approve the Articles Amendment Proposals, holders of 1,481,477 Class A Shares exercised their right to redeem their shares for a pro rata portion of the funds in the Trust Account. As a result, approximately $16.2 million (approximately $10.91 per share) was removed from the Trust Account to pay the redemption price for those shares. Upon payment of the redemption, and after giving effect to the Founder Share Conversion, BCSA had approximately 13,433,794 Class A Shares outstanding, including 2,111,794 Class A Shares having a right to request redemptions for a pro rata portion of the funds remaining in the Trust Account.

On May 9, 2024, the Company held an extraordinary general meeting of shareholders (the “Meeting”). The only proposal voted upon at the Meeting was the proposal to adjourn the Meeting to May 10, 2024 at 11:00 a.m., Eastern Time. The proposal was approved, and the Meeting was adjourned to allow the Company additional time to engage with its shareholders and consider redemption reversals. The Meeting was reconvened on May 10, 2024 and the shareholders approved a proposal to extend the date by which the Company must consummate an initial business combination (the “Extension Proposal”) from May 15, 2024 to November 15, 2024 (the “Extension”). In connection with the Meeting and the Extension Proposal, holders of 211,794 of the Company’s Class A ordinary shares that the Company issued and sold as part of units in its initial public offering had the right to redeem those shares and elected to redeem an aggregate of 533,146 Class A ordinary shares. As a result, approximately $5.96 million (approximately $11.18 per share) was removed from the Trust Account to pay the redemption price for those shares. After the redemptions, 12,900,648 Class A ordinary shares remained outstanding, including 1,322,000 shares underlying the Private Placement Units. Upon payment of the redemption price, approximately $17.6 million remained in the Trust Account.

In connection with the Meeting, the Company and its Sponsor, entered into one or more non-redemption agreements (the “Non-Redemption Agreements”) with unaffiliated investors. Pursuant to the Non-Redemption Agreements, each investor agreed not to redeem some number of Public Shares (the “Non-Redeemed Shares”) in connection with the Meeting, and in in exchange for that commitment, the Sponsor agreed to transfer Class A Shares of the Company to that investor upon the Company’s consummation of an initial business combination, so long as the investor held the Non-Redeemed Shares through the Meeting and the Extension was approved. In connection with the Meeting, the Sponsor has agreed to transfer an aggregate of 294,749 Class A ordinary shares to the non-redeeming shareholders party to the Non-Redemption Agreements.

Vendor Agreements Contingent on the Business Combination

The Company entered into an agreement with a vendor for merger advisory services and the total fee will be $6,200,000, contingent upon completion of the Qenta Business Combination. In January 2023, the Company entered into an agreement with a vendor for investment banking services. The agreement specifies that upon a successful Business Combination, the Company will owe a fee of $1,250,000 which is payable in cash or equity at the Company’s option.

Non-Redemption Agreements

The Sponsor entered into Non-Redemption Agreements with various shareholders of the Company (the “Non-Redeeming Shareholders”), pursuant to which these shareholders agreed not to redeem a portion of their shares of Company ordinary shares (the “Non-Redeemed Shares”) in connection with the Special Meeting held on February 3, 2023, but such shareholders retained their right to require the Company to redeem such Non-Redeemed Shares in connection with the closing of the Business Combination. The Sponsor has agreed to transfer to such Non-Redeeming shareholders an aggregate of 739,286 the Founder Shares held by the Sponsor immediately following the consummation of an initial Business Combination. The Company estimated the aggregate fair value of such 739,286 Founder Shares transferrable to the Non-Redeeming shareholders pursuant to the Non-Redemption Agreement to be $155,250 or $0.21 per share. The fair value was determined using the probability of a successful Business Combination of 2.25%, a volatility of 60.0%, a discount for lack or marketability of $1.04 and the value per shares as of the valuation date of $9.32 derived from an option pricing model for publicly traded warrants. Each Non-Redeeming Shareholder acquired from the Sponsor an indirect economic interest in such Founder Shares. The excess of the fair value of such Founder Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A. Accordingly, in substance, it was recognized by the Company as a capital contribution by the Sponsor to induce these Non-Redeeming Shareholders not to redeem the Non-Redeemed Shares, with a corresponding charge to additional paid-in capital to recognize the fair value of the Founder Shares subject to transfer as an offering cost. 

On October 27, 2023, the Company and the Sponsor entered into non-redemption agreements (the “October Non-Redemption Agreements”) with certain Shareholders, pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on October 27, 2023, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 2,031,411 of their Class A Ordinary Shares (the “October Non-Redeemed Shares”). Pursuant to the October Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 304,712 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such October Non-Redeemed Shares through the Extraordinary General Meeting.

The Company estimated the aggregate fair value of the 304,712 Class A ordinary shares attributable to the non-redeeming shareholders to be $0.12 per share, for an aggregate amount of $35,915. The Company has considered the relevance of SAB Topic 5T and concluded that if a business combination is consummated and if the Sponsor forfeits shares to be issued to the investor as a result of non-redemption, any settlement amounts in excess of the fair value originally recorded under ASC 815, would be recorded as an additional expense under SAB Topic 5T.

On May 9, 2024, the Company and the Sponsor entered into non-redemption agreements (the “May 2024 Non-Redemption Agreements”) with certain Shareholders, pursuant to which the Shareholders have, in connection with the Extraordinary General Meeting, on May 9, 2024, agreed not to redeem, or to reverse and revoke any prior redemption election with respect to an aggregate of 294,749 of their Class A Ordinary Shares (the “May 2024 Non-Redeemed Shares”). Pursuant to the May 2024 Non-Redemption Agreements, the Company will issue to such Shareholders an aggregate of 294,749 additional Class A Ordinary Shares immediately following the consummation of an initial Business Combination if they continue to hold such May 2024 Non-Redeemed Shares through the Extraordinary General Meeting.

The Company estimated the aggregate fair value of the 294,749 Class A ordinary shares attributable to the non-redeeming shareholders to be $0.27 per share, for an aggregate amount of $80,293. The Company has considered the relevance of SAB Topic 5T and concluded that if a business combination is consummated and if the Sponsor forfeits shares to be issued to the investor as a result of non-redemption, any settlement amounts in excess of the fair value originally recorded under ASC 815, would be recorded as an additional expense under SAB Topic 5T.

Class B ordinary shares—The Company is authorized to issue 50,000,000 Class B ordinary shares with a par value of $0.00009 per share. At July 2, 2021, there were 8,625,000 Class B ordinary shares issued and outstanding. Class B ordinary shares are subject to forfeiture to the Company for no consideration to the extent that the underwriters’ over-allotment option is not exercised in full or in part, so that initial shareholders will collectively own approximately 25% of the Company’s issued and outstanding ordinary shares after the Initial Public Offering (excluding the Private Placement Shares). On November 9, 2021, the Company effected a 1.1111111-for-1 stock split and a 379,500 Class B ordinary share stock dividend with respect to Class B ordinary shares, resulting in 10,005,000 Class B ordinary shares being issued and outstanding, 1,305,000 of which were subject to forfeiture if the over-allotment option were not exercised in full or in part by the underwriters. As a result of the stock split, the par value of Class B ordinary shares was lowered to $0.00009. On November 15, 2021, the underwriters partially exercised their over-allotment option resulting in 5,000 shares being forfeited and 10,000,000 Class B ordinary shares issued and outstanding.

On October 27, 2023, the Sponsor of the Company, voluntarily elected to convert all 9,850,000 of its Founder Shares to Class A Shares, and the independent directors of the Company voluntarily elected to convert all 150,000 of their Founder Shares to Class A Shares, in each case, on a one-for-one basis in accordance with the Memorandum and Articles of Association. The Sponsor and the independent directors waived any right to receive funds the Trust Account with respect to the Class A Shares received upon such conversion and no additional amounts were deposited into the Trust Account in respect of any of those Class A Shares.

As of June 30, 2024 and December 31, 2023, there were zero shares issued and outstanding.

Prior to the initial Business Combination, only holders of Class B ordinary shares will have the right to vote on the appointment of directors. In addition, in a vote to continue the Company in a jurisdiction outside the Cayman Islands (which requires the approval of at least two thirds of the votes of all ordinary shares voted at a general meeting), holders of the Class B ordinary shares will have ten votes for every Class B ordinary share and holders of Class A ordinary shares will have one vote for every Class A ordinary share. Holders of the Class A ordinary shares will not be entitled to vote on the appointment of directors during such time. In addition, prior to the completion of an initial Business Combination, holders of a majority of Class B ordinary shares may remove a member of the board of directors for any reason. With respect to any other matter submitted to a vote of the shareholders, including any vote in connection with the initial Business Combination, except as required by law, holders of Class B and Class A ordinary shares will vote together as a single class, with each share entitling the holder to one vote.

The Class B ordinary shares will automatically convert into Class A ordinary shares at the time of the initial Business Combination at a ratio such that the number of Class A ordinary shares issuable upon conversion of all Class B ordinary shares will equal, in the aggregate, on an as-converted basis, approximately 25% of the sum of (i) the total number of ordinary shares issued and outstanding upon completion of the Initial Public Offering, plus (ii) the total number of Class A ordinary shares issued or deemed issued or issuable upon conversion or exercise of any equity-linked securities (as defined herein) or rights issued or deemed issued, by the Company in connection with or in relation to the consummation of the initial Business Combination (after giving effect to any redemptions of Class A ordinary shares by Public Shareholders), excluding any Class A ordinary shares or equity-linked securities exercisable for or convertible into Class A ordinary shares issued, deemed issued, or to be issued, to any seller in the initial Business Combination and any Private Placement Units (and securities included in the units) issued to the Sponsor, its affiliates or any member of the management team in the Private Placement or upon conversion of Working Capital Loans. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than one to one.

The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend or recapitalization, reorganization, merger or consolidation. In addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of the initial Business Combination at an issue price or effective issue price of less than $9.20 per ordinary share (with such issue price or effective issue price to be determined in good faith by the board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the initial Business Combination on the date of the consummation of the initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described under “Redemption of warrants when the price per Class A ordinary share equals or exceeds $18.00” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market value and the Newly Issued Price.

The warrants underlying the Private Placement Units (the “Private Placement Warrants”) are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the ordinary shares issuable upon exercise of the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A ordinary shares issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.

Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described herein with respect to the Private Placement Warrants):

The Company will not redeem the warrants as described above unless an effective registration statement under the Securities Act covering the Class A ordinary shares issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A ordinary shares is available throughout the 30-day redemption period. If and when the warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

During the period ended June 30, 2023, the Company has concluded that the fair value of the conversion feature on 2023 proceeds from principal, requires bifurcation under ASC 815 and is considered de minimis. The underlying economics of the transaction are more accurately represented by recording this portion of the convertible debt agreement as a liability at par value given the de minimis value of the embedded conversion feature in this case.

For the three and six months ended June 30, 2024 and 2023, the Company recognized a loss/gain of approximately $360,203 and $158,176, $883,000 and $66,000, respectively, resulting from a change in the fair value of derivative liabilities, which represents changes in fair value of the Private Placement Warrants, presented as change in fair value of derivative liabilities on the accompanying unaudited condensed consolidated statements of operations. For the year ended December 31, 2023, the Company recognized a gain of approximately $158,000.

The fair value of the shares received from Qenta were determined by the Finnerty model. This model incorporates Level 3 inputs and critical assumptions, including an assessment of the Company’s assets, liabilities, stock price volatility, expected duration until value realization, and the probability of successful transactions. It evaluates stock price volatility using historical data and market movements, integrating the risk-free interest rate.

The Company has recorded the estimated Fair Value of the Qenta Shares as an investment on its Balance Sheets and as termination income on its Statements of Operations as of and for the year ended December 31, 2023 in the amount of $4,070,807. The Company recorded the fair value of the Qenta Shares on the date they were received and determined that the change in fair value between inception and December 31, 2023 was de minimis. There was a change in the fair value of the Investment in Qenta in the amount of $216,545 during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2024, the Company transferred 10 shares of Qenta, as a payment for certain accrued legal expenses to certain legal firms amounting to $770,853.

The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates for the derivative Private Placement warrant liabilities:

The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates for the Qenta Investment Asset as of June 30, 2024 and December 31, 2023:

The following table provides quantitative information regarding Level 3 fair value measurement inputs at their measurement dates for the Convertible Promissory note as of June 30, 2024 and December 31, 2023:

The change in the fair value of derivative assets and liabilities, measured using Level 3 inputs, for the three and six months ended June 30, 2024 and 2023 is summarized as follows:

The change in the fair value of the convertible note—related party, measured utilizing Level 3 measurements for the three and six months ended June 30, 2024 and 2023, is summarized as follows:

The change in the fair value of the Investment in Qenta Equity, at fair value, measured utilizing Level 3 measurements for year ended December 31, 2023 and period ended June 30, 2024, is summarized as follows: