Note 1 — Organization, Plan of Business Operations, Going Concern and Management’s Plans, Risks and Uncertainties and Basis of Presentation Organization and Plan of Business Operations Zalatoris Acquisition Corp. (f/k/a Trajectory Alpha Acquisition Corp.) (the “Company”) is a blank check company incorporated in the State of Delaware on February 1, 2021. The Company was formed for the purpose of effecting a merger, consolidation, capital stock exchange, asset acquisition, stock purchase, reorganization , or similar business combination with one or more businesses or entities (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. All activity for the period from February 1, 2021 (inception) through June 30, 2023 relates to the Company’s formation, the IPO (as defined below) and, since the closing of the IPO, the search for a prospective initial Business Combination. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. The Company’s sponsor is J. Streicher Holdings, LLC, a Delaware limited liability company (the “Sponsor”). See below for details of the change in sponsor on June 2, 2023. On December 14, 2021, the Company completed the initial public offering (the “IPO”) of 17,250,000 units at $10.00 per unit (the “Units”), including the issuance of 2,250,000 Units as a result of the underwriter’s over-allotment option being exercised in full. Each Unit consists of one share of Class A common stock (the “Class A Common Stock”) and one-half of one redeemable public warrant (the “Public Warrants”). Each whole Public Warrant entitles the holder to purchase one share of Class A Common Stock at a price of $11.50 per share. Simultaneously with the consummation of the IPO and the full exercise of the over-allotment option by the underwriter, the Company consummated the private placement of 5,725,000 private placement warrants (the “Private Placement Warrants”) to Trajectory Alpha Sponsor LLC, the Company’s former sponsor (the “Former Sponsor”), at a price of $1.00 per Private Placement Warrants in a private placement transaction. On June 2, 2023, the Company entered into a Purchase and Contribution Agreement (the “Purchase Agreement”) with the Sponsor and the Former Sponsor, pursuant to which the Sponsor contributed $250,000 to the Company (the “Contribution”) and paid $1.00 to the Former Sponsor (the “Consideration” and together with the Contribution, the “Purchase Price”). In return, the Former Sponsor sold and assigned to the Sponsor 2,170,464 shares of Class B common stock (“Class B Common Stock”) of the Company and 4,525,000 Private Placement Warrants. In connection with the Purchase Agreement, effective June 2, 2023, Peter Bordes, Paul Sethi, Jonathan Bond, Ninan Chacko, and Elisabeth H. DeMarse tendered their resignations as directors of the Company, and Peter Bordes and Michael E.S. Frankel resigned as officers of the Company. Effective June 2, 2023, Jonathan Bond, Ninan Chacko, and Elisabeth H. DeMarse also resigned as directors of the audit committee, compensation committee, and nominating and corporate governance committee of the Company. On June 2, 2023, in connection with the Purchase Agreement, Pantelis Dimitriou, Niall Ennis, Paul Davis, Adeel Rouf, and Sarah Watson were appointed as members of the board of directors of the Company. Paul Davis was appointed as Chief Executive Officer of the Company, and Pantelis Dimitriou was appointed as the Company’s Chief Financial Officer. In addition, on June 2, 2023, the Company entered into a Purchase Agreement (the “Metric Assignment”) with the Sponsor, the Former Sponsor, and Metric Finance Holdings II, LLC (“Metric”), pursuant to which the Sponsor acquired 422,434 shares of Class B Common Stock from Metric. Accordingly, the Sponsor now holds 2,592,898 shares out of the 4,312,500 issued and outstanding shares of Class B Common Stock and 4,525,000 Private Placement Warrants out of the 5,725,000 issued and outstanding Private Placement Warrants. Extension Amendment to Amended and Restated Certificate of Incorporation On June 12, 2023, at a special meeting of the Company’s stockholders (the “Special Meeting”), the stockholders of the Company approved an amendment (the “Charter Amendment”) to the Company’s amended and restated certificate of incorporation, which amended the structure and cost of the Company’s right to extend the date (the “Termination Date”) by which the Company must (i) consummate a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses, (ii) cease its operations if it fails to complete such Business Combination, and (iii) redeem or repurchase 100% of the Company’s Class A Common Stock included as part of the units sold in the Company’s initial public offering. The Charter Amendment allows the Company to extend the Termination Date by up to nine one-month extensions to March 14, 2024 (each one-month extension period, an “Extended Period”) provided that if any Extended Period ends on a day that is not a business day, such Extended Period will be automatically extended to the next succeeding business day. To obtain each one-month extension, the Company, the Sponsor, or any of their affiliates or designees must deposit into the Company’s trust account by the deadline applicable prior to the extension the lesser of (i) $150,000 and (ii) an aggregate amount equal to $0.04 multiplied by the number of public shares of the Company that were not redeemed in connection with the stockholder vote at the Special Meeting (the “Extension Fee”). To date, the Company has caused an aggregate of $450,000 to be deposited into the trust account for the first, second, and third monthly extensions. On June 26, 2023, the board of directors of the Company filed a certificate of amendment to the amended and restated certificate of incorporation with the Secretary of State of Delaware, pursuant to which the Company’s name was changed from “Trajectory Alpha Acquisition Corp.” to “Zalatoris Acquisition Corp.” (the “Name Change”). This Name Change became effective as of the filing date. Trading under the new name began on June 27, 2023. The funds in the trust account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government obligations. Funds will remain in the trust account until the earlier of (i) the consummation of its first Business Combination and (ii) the distribution of the trust account as described below. The remaining proceeds outside the trust account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. On June 14, 2023, the Sponsor deposited $150,000 related to Extension Fees into the Company’s trust account on behalf of the Company. Such amounts are required to be repaid by the Company to the Sponsor (a “related party”). As of June 30, 2023, the Company had recorded $150,000 of Extension Fees due to a related party on the condensed balance sheet. Redemption of Public Shares On June 12, 2023, the Company held a Special Meeting where the Company’s public stockholders voted and approved a proposal to amend the Company’s Amended and Restated Certificate of Incorporation, which triggered a right of the Company’s public stockholders to demand the redemption of their public shares out of funds held in the Company’s trust account. Prior to redemptions, the Company had 17,250,000 public shares outstanding. Holders of 10,891,882 of the Company’s public shares properly requested redemption, resulting in 6,358,118 public shares outstanding, and approximately $113 million was paid to the redeeming public stockholders (the “Redemptions”). The funds held in the Company’s trust account, including any interest thereon, will not be used to pay for any excise tax liabilities with respect to any of the redemptions or future redemptions prior to or in connection with an initial business combination or the liquidation of the Company. The excise tax, when or if it becomes due, will be paid by the Company. Following the closing of the IPO and full exercise of the over-allotment option by the underwriter on December 14, 2021, approximately $174 million ($10.10 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was deposited into the trust account. After taking into account the Redemptions described above, there was $66,308,375 available in the trust account as of June 30, 2023. The Company’s management has broad discretion with respect to the specific application of the remaining net proceeds of the IPO, although substantially all of the net proceeds of the IPO are intended to be generally applied toward consummating a Business Combination with (or acquisition of) a target business. As used herein, “target business” must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable on interest earned) at the time of the Company’s signing a definitive agreement in connection with a Business Combination. Furthermore, there is no assurance that the Company will be able to successfully effect a Business Combination. The Company’s amended and restated certificate of incorporation allows the Company to extend the Termination Date by up to nine (9) one-month extensions to March 14, 2024. If the Company is unable to complete the initial Business Combination by the Termination Date (or any Extended Period), the Company will (1) cease all operations except for the purpose of winding up, (2) 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 (which interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any) and (3) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Going Concern and Management’s Plans As of June 30, 2023, the Company had $7,115 in its operating bank account and adjusted working capital $(1,257,897) (which includes a pending reimbursement from the trust account for the Company’s franchise taxes and income taxes in the aggregate amount of $840,204 ). In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, initial stockholders, officers, directors or their affiliates may, but are not obligated to, provide the Company with Working Capital Loans (as defined below) (see Note 3). As of June 30, 2023, there were no amounts outstanding under any Working Capital Loans other than the $150,000 due to the Sponsor which is disclosed elsewhere. The Company intends to request additional Working Capital Loans until a Business Combination is consummated. Management has determined that the possibility that the Company may be unsuccessful in consummating an initial Business Combination by March 14, 2024 (subject to paying for six additional one-month extensions as provided above) and thereby be required to cease all operations, redeem the public shares and thereafter liquidate and dissolve, raises substantial doubt about the ability to continue as a going concern for at least one year from the date the financial statements included in this Quarterly Report on Form 10-Q were issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company decides to extend the business combination period by up to six months, then the Company will need to raise additional capital in order to fund the working capital needs of the Company. The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The financial statements do not include any adjustment that might result from the outcome of this uncertainty. The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed financial statements of the Company as of June 30, 2023 and for the three and six months ended June 30, 2023. The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the operating results for the full year ending December 31, 2023 or any other period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related disclosures for the year ended December 31, 2022 which are included in the Annual Report filed on Form 10-K on March 10, 2023.
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